It looks like the casual dining industry has taken a huge hit in the current recession despite its massive success over the last 40 years.
A new report from Allegra Strategies shows the amount of Brits eating out for less than £15 has decreased for the first time in four decades.
The report reveals only one in nine meals will eaten outside the home with more people choosing to save by dining in – due in large to the big marketing drives of the likes of supermarket deals like Sainsbury’s “Feed your family for a fiver” and Marks & Spencer’s “Dine in for £10”.
The study also highlights the fact that while the whole eating out industry has been hit hard, restaurants charging over £10 a head are feeling the pinch the most. Casual dining along with world cuisines like Indian, Chinese and Kebab shops are amongst some of the worst affected. Allega said, “Both operate at relatively high transaction values.”
Project director at Allegra Strategies, Steve Gotham, said, “This report shows that, while some companies continue to do well, many are suffering.The industry will have to become more consumer-focused as customers won’t forget what they are learning in the recession. Eating out may have become an everyday experience, but when the economy picks up, people won’t go back to paying over the odds for a meal.”
Mark Brumby, leisure analyst for Astaire Securities, the broker, said, “This is a downward move in an upward trend. I think that the industry will be bigger in ten years’ time than it is now. Whether it will be bigger than it is now in two to three years is more debatable.”
Mr Brumby spoke of last week’s results statement from Clapham House – owner of Gourmet Burger Kitchen and the Real Greek restaurant chains, “David Page, the chairman, was pointing out how promotional activity was on the increase — vouchers, two-for-one deals and so on — and how that was hitting margins. People are cutting the price of what they pay and in those circumstances, one would expect to see the smaller, independent operators, going to the wall.”
Steve Easterbrook, chief executive of McDonald’s UK, said, “Whilst the market is in decline, the sector is not falling as fast as other industries and there are some brands doing well.”
Douglas Roxburgh, president of the National Federation of Fish Friers, said, “Instead of buying cod and chips, for example, [people] are perhaps buying sausage and chips, which is half the price, or just chips and gravy. The average spend is definitely down.
“It concerns us greatly. At the moment, there are around 11,000 fish-and-chip shops, but I would expect a number to close during the next year.”
