Encouragingly for most, MCA predicts that 2020 will see stronger net physical increases in store portfolios across the majority of leading operators.

MCA’s Operator Data Index includes over 350 branded operators with five or more outlets at December 2019. These stretch across the full spectrum of the market and account for close to 27,000 outlets which claimed modest overall year on year growth of just under 1% in 2019. We are expecting this growth rate to double to 2% in December 2020, with over 500 net new outlets to open, equating to 11 per week.

The 2020 growth will be led by 170 operators increasing their store portfolios, compared with 150 last year, though again, in the majority of cases this is likely to be by three or fewer sites. By contrast, 87 operators are expected to reduce their estate size, with 92 forecast to remain in stasis.

Greggs pushing further ahead

Greggs smashed through the 2,000-strong store mark last year and has already announced plans to open around 100 new shops this year. This expansion will again place it head and shoulders above any competing operator in the growth league table. Other notable growers, with around 30 net new openings, are expected to include Costa, Domino’s, KFC and Pret A Manger.

Pret’s expansion, and that of Veggie Pret too, will be underpinned by conversions from former EAT stores. KFC’s growth is being boosted by its widening store format strategy, that includes a growing focus on drive-thrus and suburban small box sites (supported by a strong delivery focus), as well as more traditional food court and high street outlets. As with Costa and Domino’s, KFC’s growth is facilitated by its franchise-led business model, though this highlights growing competition for more experienced and better funded franchisees.

Transferrers, rationalisers and fallers

Among the 87 brands expected to see declining estate numbers, the key reason lies with brands being transferred or reallocated to stronger, and more profitable, identities with parent groups. These include Eat (to Pret), Frankie & Benny’s (Wagamama), Pod (Coco di Mama), Brewers Fayre (assorted Whitbread alternatives) and Flaming Grill (assorted Greene King alternatives).

In addition, and unfortunately, there will continue to be some casualties in the market, with Handmade Burger Co an early 2020 faller. Also, some further portfolio right-sizing too. We anticipate some modest reductions at the likes of Byron, Carluccio’s and JD Wetherspoon.

Overall, the future’s brighter and it’s more service-led

MCA’s ODI forecasts are prepared independently from the recent Top of Mind industry executive survey. Nevertheless, it is encouraging to see some common ground in terms of more upbeat industry views about trading prospects in 2020 than in 2019, and with the accelerating physical expansion expectation.

Interestingly also, the Top of Mind survey found slightly greater positivity amongst foodservice and hospitality professionals as opposed to their compatriots within grocery retail. The growth in Foodservice is in part being supported by the much-publicised travails within bricks & mortar retailing that is opening up enhanced physical availability. In the process this is changing the complexion of the High Street from being about stuff to service. I am certainly not saying more Eating & Drinking Out is going to be the saviour of the High Street, but it is in the vanguard of its service-led evolution.