As the hospitality industry re-opens and savvy consumers vote with their feet, the most successful venues will be those that offer a clear consumer benefit, whether that’s a high-end experience that cannot be replicated at home or seamless, low contact interaction.

Following just 11 weeks of ‘normal’ trading in 2020, the eating out market almost halved, to a value of £48bn, according to the new Lumina Intelligence Eating Out Market Report 2021. With restrictions dragging on through much of the first half of 2021, operators are keen to make up for lost time – but with three in 10 consumers planning to eat out less often, not to mention staffing challenges, it’s not going to be easy and the market is expected to return to just 70% of its 2019 value in 2021. With ample choice over where to take their meals out, consumers will be looking for a mix of good value, treating and venues that can appease their nervousness about mixing with others.

Within branded restaurants, those operators expected to see the strongest recovery in 2021 have a proposition that is clearly understood and is either occasion-led or casual-led. The former includes the like of Côte and Miller & Carter, which seek to deliver a consumer experience that isn’t easily replicable at home. This is demonstrated in the expansive cocktail range and attention to detail in the presentation of the food from both brands. The focus on food quality at Miller & Carter is reinforced by its ‘Masters of steak’ accreditation from the Craft Guild of Chefs. Similarly, Whitbread’s premium brand Bar + Block offers high quality steaks, with theatre created through butchers’ stations, central bars and large open kitchens.

Successful casual-led operators including Nando’s and Wagamama, are using technology and the associated service efficiencies to speed up the consumer journey, while continuing to offer a high consistency and quality of food. Nando’s – recently named Best Company at MCA’s Retailer’s Retailer Awards 2021 – has innovated constantly through the pandemic, including the launch of a cashless order and pay app, click & collect service and the industry-first integration of Deliveroo ordering technology into Nando’s own website. A strong focus on delivery has also stood both brands in good stead.

The importance of delivery

Similarly, a focus on delivery will be key success factor in 2021 for the fast-food sector, with German Doner Kebab, Five Guys, Pepe’s Piri Piri and KFC leading turnover recovery. Not only has delivery provided a significant revenue stream through the lockdowns, it is expected to command a higher proportion of total fast food sales going forward due to the fact that fast food travels well, is relatively low value and quick to produce, together with unrelenting consumer demand.

Looking at the fastest growing restaurant brands by outlets, they are all distinctive and specialised concepts, which tap into key consumer trends, including lighter and healthier cooking methods and contemporary cuisines – and are expanding selectively with a targeted approach. In percentage terms, the fastest growing brand is German Doner Kebab, expected to grow outlets by +31% (from 52 to 68), in addition to its thriving delivery business.

This is followed by Mowgli which meets consumers requirements for healthy and simple food that meets multiple dietary requirements, with a shrewd expansion strategy focussed on cities but deliberately avoiding the capital, in a bid to snap up attractive sites for more accessible rents. Meanwhile, Five Guys is the fastest growing brand in actual outlet numbers with an anticipated +25 sites in 2021 – and again, its proposition is clear, as it flouts its unconventional points of difference including an absence of freezers in its outlets and its fries, which are hand-cut in store daily.

The need for a clear proposition is not new – particularly in the eating out market, which suffered from over-expansion within the casual dining space, resulting in a need for rationalisation and refinement. As previously identified, medium sized brands are more agile, allowing them to try new things quickly and perhaps suggesting that a format can only reach a certain scale in order to be perceived as authentic. Certainly, the days of heady expansion feel behind us (for the short term at least), with most operators looking to increase their estates by a modest number of sites in 2021.

The Lumina Intelligence Eating Out Market Report 2021 is available now. This definitive report quantifies the size and growth of the market and provides channel forecasts out to 2024, with a detailed look at growth drivers and potential inhibitors. The report also includes consumer insight from Lumina Intelligence Eating and Drinking Out Panel and you’ll receive three further updates of this information included within the price of the report.