UK Restaurant Leader Report | Allegra Report



21 June 2010, London – Allegra Strategies released its UK Restaurant Leader Report. The report is provides the industry with valuable insight into the key trends and challenges currently facing the sector and forecasts market development over the next 3-5 years.

Main Messages

The UK restaurant market appears to have turned a corner with the majority of businesses reporting positive like-for-like trading results. A stream of new, dynamic, fast casual operators are entering the marketplace to meet consumer demand for greater informality and more variety. The result is a more fragmented sector with a greater number of specialised operators. With competition intensifying, restaurant operators will have to innovate to deeply engage with their customers. Winning consumers, delivering value and offering a superior customer experience, all without sacrificing margins, will be the key challenges for operators going forward. The long term outlook for the UK restaurant sector remains highly positive, with industry executives and consumers agreeing there will be more eating out in the future.

Key findings

Positive trading has resumed for the majority of businesses 

• Industry sentiment regarding the future trading environment is optimistic 
• 77% of businesses reported positive like-for-like trading performance during Spring 2010
• Despite a more favourable outlook on the trading environment, industry leaders remains cautious

The post recession era brings new challenges for operators

• Operators strive to grow margins while meeting consumers’ heightened levels of value consciousness
• Key consumer trends which became less of a priority during the economic downturn, most notably healthier eating and ethical consumerism, have re-entered consumer mindsets
• Competition is intensifying as new fast casual concepts enter the marketplace to meet growing consumer appetite. 
• 21% of operators claim they plan to open 20 or more outlets in the next 12 months but expansion is being hampered by a shortage of suitable sites
• Restricted availability of funding is preventing investment into businesses in need of rejuvenation and inhibiting the expansion plans of some thriving businesses

Healthier eating set to impact the industry more profoundly

• There is greater agreement than ever before that restaurants should provide nutritional information. Operators and suppliers will need to assess how to manage the resultant measurement and compliance costs, as well as customer communication
• 42% of industry executives believe healthy eating concepts will become more prevalent within the marketplace in the short to medium term
• Pret A Manger is the most admired industry brand and Jamie Oliver most highly regarded individual

Fast casual concepts to dominate

• The fast casual restaurant sector is fragmenting. At one end of the spectrum there is growing appetite for low-priced, street inspired cuisine types and at the other, demand for higher-priced authentic restaurants which excel in food, environment and experience. The ‘one size fits all’ approach will lose out in this dynamic marketplace

Demand for Mexican food rises 

• The popularity of Mexican food with UK consumers has grown notably in the last 12-18 months. 
• UK consumers still display a growing appetite for South East Asian food i.e. Thai, Vietnamese and dim sum concepts. Cuisine types are expected to become more segmented/regionalised

Editors Notes:

Allegra Strategies is a London-based management consultancy and has accurately predicted trends in the UK branded coffee shop market since 1999. Allegra is recognised as one of the global leaders in coffee sector and foodservice research.

- 175 interviews with leading executives across the UK restaurant sector
- Online in-depth interviews
- Survey Completed May 2010

For further information or to purchase this report (£650 plus VAT) please contact Yvette Mackenzie on 020 76918842 or email yvmackenzie@allegra.co.uk.