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Restaurants
Growth since 1997 increased the UK restaurant market's share of total catering sales to 34.5% at retail selling prices (rsp) in 2001. The restaurant market was valued at an estimated £15.54bn, including fast-food outlets and other restaurant and caf? meals in 2001. Sales in the fast-food category increased by only 3.2% in 2001, while other restaurant and caf? sales increased by 4%.
Key sectors in the restaurant market are burger restaurants, public-house (pub) restaurants, pizza/pasta restaurants, roadside catering, chicken restaurants and miscellaneous restaurants. Burger outlets represent the largest single sector but sales growth was weak in 2001, as promotions and switching to other catering options affected sales. Pub restaurants are the second-largest single category, with sales growth in this sector registering 3.8% in 2001. Roadside catering experienced some of the strongest growth helped by more road travel and outlet refurbishment. The pizza/pasta restaurant market was boosted by another good year for the premium sector, but the most impressive growth came in the chicken restaurant sector, where more outlets were targeted at families and restaurants benefited from some switching from burgers.
The miscellaneous restaurants sector includes a range of outlets and cuisines from ethnic outlets through to informal dining concepts and premium outlets. While it is the largest sector, representing 68% of all sales in the restaurant market, it has few major brands and its structure is fragmented. Some up-market restaurants in this sector are experiencing growth, but many middle-market operators have seen less impressive growth.
A relatively strong economy and increases in personal disposable income have helped to boost eating-out spending. The share of household food and drink expenditure taken by spending on food eaten outside the home has been growing year-on-year. However, while demand for restaurant food continues to grow, the number of outlets has increased at an even faster rate and there are now signs of overcrowding in some market categories. Leading players, such as City Centre Restaurants, Six Continents, Scottish & Newcastle, and Whitbread, have been disposing of non-core brands, while many smaller chains have faced declining profit margins and closures.
External problems in 2001, such as the foot-and-mouth epidemic, travel problems, and the 11th September 2001 terrorist attack in the US, have all had a negative impact on the restaurant industry. This has exacerbated concerns that the restaurant sectors are facing more difficult times in the next few years.
The restaurant industry should see similar growth in 2002 as in 2001. Sales growth to 2006 will be slower than in the previous 5 years, as some reduction in consumer discretionary spending affects sales. Consumers are likely to eat out more infrequently and look to customer service and menu quality to differentiate restaurant brands.
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