The lines between foodservice and food retail is set to continue to blur, and it may not be long before we see a foodservice group acquiring a high street restaurant group or a grab-and-go operator, according to leading advisory firm AlixPartners.
Graeme Smith, managing director at AlixPartners, said: “As many Business & Industry (B&I) operators will say, the main competition for city centre B&I contracts is the high street. That competition has inspired a number of leading operators to develop their own brands, use a pop-up approach to bring food trends such as street food to the workplace, or form partnerships with new or established brands to keep workers in the building.
“Some operators are going beyond that by expanding directly onto the high street (for example Benugo and Apostrophe) or into larger, fixed locations (Sky Garden by rhubarb or City Social by Restaurant Associates with Jason Atherton). The trend stepped up a gear this year, with WSH signing a joint venture with Mark Hix for his restaurant operations, thereby augmenting the dedicated restaurant division that was set up in 2015.
“As consumers’ expectations of the quality and variety of food provision continue to rise, we expect convergence to remain a key trend. It may not be long before we see a foodservice group acquiring a high street restaurant group or a grab-and-go operator.”
Smith said that the outlook for 2017 for the foodservice industry will likely be dominated by developments in the negotiations over Britain’s exit from the EU and the impact of those negotiations on economic activity.
He said: “In the short term following the vote, the impact has been felt most acutely in the devaluation of sterling, which has resulted in an increase in the number of visitors to the UK who are attracted by comparatively lower prices. The impact has also started to feed through to increasing prices for imported products and services. In addition, businesses are adapting to implementation of the national living wage, which affects the hospitality and leisure sector because it’s a people-driven sector. Those pressures may lead to further consolidation, but we expect the sector as a whole to continue to adapt, evolve, and thrive.”
