Why small restaurant brands are thriving in the competitive dining sector

Big is always better, that’s how the saying goes. However, that’s certainly not the case in the restaurant industry today where smaller dining brands are expanding six times faster than bigger competitors. Although growth across the whole dining sector has been fairly modest, it’s the smaller restaurant brands that have been steaming ahead and achieving far more in terms of expansion than many of the bigger names in the industry have been able to do.

The casual dining sector is growing steadily

Recent research has revealed that the casual dining sector is retaining a pretty modest growth rate of around 1.8%. However, smaller casual dining brands have been performing much better than the sector overall. Smaller brands are defined as those that have 25 sites or fewer. It’s these more compact dining brands that have been expanding at the faster rate, seeing a 32% increase in the number of sites over the past three years. Medium sized dining brands also achieved an impressive growth rate with around a 47% increase in the number of premises. Medium sized dining sector businesses are classified as those that have more than 25 but less than 99 sites. What’s very notable is that the largest casual dining brands are those that have achieved the least in growth terms. These big names - where the brand has at least 100 sites – have been seeing growth as low as just 7%.

Some big names continue to grow

Not all big brands have seen reduced or slowed levels of expansion. Nandos and Wagamamma are two very well known chains that have bucked the trend and continue to grow at impressive rates. However, for most of the bigger brands this is simply not the case. Instead, the space in the market that they have created is being filled by small and medium sized brands. In particular, those dining businesses that are exploring new concepts are proving especially popular. In the UK, the concentration of new concepts is especially high in London – this also happens to be the location where the growth levels for bigger brands are the most significantly reduced.

Casual dining is a maturing market

There are many reasons that can be identified to explain the shifts taking place in casual dining industry growth. Brexit, for example, has had an effect on slow growth, in particular when it comes to weak consumer confidence that results in less spending. Rising food prices and issues following the drop in value of the pound have also contributed, as has the steady increase in UK property prices. However, many also point out that the market is maturing and this, too, may be the reason why it is changing. A lack of evolution by some of the larger brands has left them looking out of date and unappealing to consumers who are keen for innovation and creativity in casual dining, something the small and medium sized brands tend to excel at.

The industry is constantly changing and it’s crucial to have an infrastructure in place to support your business. Our ePOS solutions provide so much more than just payment options – contact us to find out more.

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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.