Restaurant growth has slowed to the lowest growth rate in the past 5 years

Times are tight for many sectors today and the restaurant industry is no different. A recent study by Deloitte found that UK businesses are the most anxious about Brexit that they have ever been and that this is causing many to slow down growth and investment almost to a complete halt. The same is true for many consumers who are equally as uncertain about what the true impact of leaving the European Union will be. This, combined with other specific factors, is not exactly creating ideal conditions for growth for enterprises in any sector.

The restaurant sector, in particular, is suffering

A recent report by eating and drinking market insight company MCA found that restaurant growth has seriously stagnated. It valued the restaurant sector at £89.4bn with 327,000 outlets. However, it also identified a growth rate of just 1.5% - this represents the slowest rate of growth for the restaurant industry over the past five years.

There is no doubt that the fact that Brexit is due to happen next year – a no deal Brexit, as things currently stand – is having an impact. In fact, the MCA report identified “wider economic uncertainty” as one of the main reasons for the very sluggish rate of growth. The top 10 eating out brands make up around 17.5% of the market in total and for these brands growth reached just 0.3%. Coffee shops and cafes were some of the best performing outlets, achieving growth of 1.6%.

Consumer habits are changing

The MCA report identified that consumers are eating out with less frequency than used to be the case, which ties in with the view that economic concerns are making us all a little more frugal. Evening dining saw the most significant decline in terms of visiting frequency and there are clear signs that consumers are cutting back on snacking. Diners today look for a combination of quality and value and so the industry has seen a sharp rise in the use of promotions for eating out – 13.6% of visits now involve a promotion. In branded restaurants this percentage shoots up to more than 31%.

What does the future look like for restaurant growth?

The MCA report identified that more traditional top players, such as KFC or MacDonald’s are being challenged by newer brands, including Itsu. It also noted the most pessimistic outlook for branded restaurants, which look likely to suffer the most this year. In fact, the growth rate for branded restaurants is not only slowing but going into decline at -1.6%. Overall, however, there is a more hopeful outlook, modest but hopeful.

The MCA report predicted a small uplift for restaurant growth by 2021 when the number of outlets will have increased to 331,131 and the market as a whole will be worth £94.4bn. Important to note is that the report identifies getting over the Brexit fence next year as one of the major factors that will contribute to more stability for the sector overall. So, although conditions now are difficult for the restaurant sector, the future does look brighter.

Get in touch with Comtrex today to find out how our ePOS solutions could help to transform your restaurant today.

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About Us

We are an ePOS systems company specialising in the casual and fine dining sectors, and have been designing, developing and supplying ePOS to restaurants for over 30 years.

Whether you are a single restaurant or a national chain, we can help.