Growing appetite for contemporary fast food leaving traditional fast food operators lagging behind.
Growing appetite for contemporary fast food leaving traditional fast food operators lagging behind
• Rapid acceleration continues in the contemporary fast food segment. The segment is expected to increase in outlets and turnover by 20% and 25% in 2016 to 497 outlets and £607m respectively. The segment is driving growth in the branded fast food market which is set to grow in turnover by 0.5pp to 7.1% this year. By comparison, traditional fast food outlet growth is sluggish, expected to decline by 1pp from 4.7% to 3.7% in 2016.
• Five Guys and Leon driving outlet growth for top ten contemporary fast food brands. Five Guys is expected to open the most outlets in absolute terms, with 25 sites added this year including openings in Brighton, Harrogate and Watford. Leon is also set to show impressive growth with the brand forecast to expand its estate to 49 outlets this year, with openings lined up including Liverpool Street Station and Brunswick Square. Itsu continues to lead the segment by outlets with a 73-strong estate this year.
• Smaller emerging brands are the fastest growing in the segment. Coco Di Mama is the fastest growing in the contemporary fast food segment, set to grow by 180% in 2016, with sites opened in Bow Cross and Leather Lane this year. Friska and Hummus Bros will also deliver impressive outlet growth, up by 50%, with the former opening its first transport hub in Luton Airport this year.
• Contemporary fast food brands looking to regions for expansion opportunities. Six out of the top ten brands are expected to have net openings in the regions this year. Tortilla has opened its first site in Scotland, in Silverburn this year, whilst Itsu opened its first site in the North in Spinningfields, Manchester. Five Guys and Barburrito are more regional focused than other brands with more than double the sites in the regions than in London.
• Itsu leads in turnover of contemporary fast food brands. Itsu leads the contemporary fast food segment in terms of turnover at £90m this year. Five Guys is the fastest growing brand, up 79% to £75m in 2016, with the brand set to overtake Itsu as the leading brand if it continues its current rate of expansion.
• Contemporary fast food will continue to prosper. MCA expects continued rapid expansion for contemporary fast food brands, with the segment forecast to grow by a CAGR of 13.7% between December 2016-2019 to a total of 730 outlets. Five Guys will continue to be a major driver of this growth, on track for 25 openings this year as the brand works towards its goal of 200 UK sites. Growth will also come from previously London-centric chains openings more stores in the regions, including Itsu, Leon and Wasabi.
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