Restaurants hit by supermarket meal deals
The UK’s increasingly popular dine at home culture has made restaurants accountable for almost half of all Hospitality and Leisure (H&L) insolvencies in the quarter before Christmas.
The reduction in consumer’s expendable income coupled with off-trade meal deal offers has resulted in a trend for diners to stay at home and cook, says a PricewaterhouseCoopers (PwC) report. While 14 per cent of consumers said they were likely to cut back spending on takeaways and fast food, 11 per cent said they would cut back on eating out when times got tight.
Offers such as Marks and Spencer’s dine in for £10 that target the lucrative weekend diners, plus the current surge in cookery programmes that have encouraged ‘aspirational cheffing,’ has resulted in 141 restaurant insolvencies in Q4 of 2008 alone.
Stephen Broome, H&L director at PwC, said: “In addition to a number of expected high-end restaurant failures, those mid-range restaurants that do not focus on either a value for money or a unique dining experience have been disappearing from our streets since last summer. This trend is likely to accelerate.”
The report also notes a continuing number of pub insolvencies, with 64 per cent more closures in 2008 than in 2007 when the smoking ban, a wet summer and England’s failure to qualify for the European football championships savaged the industry.
“With beer sales falling to a record low and almost 40 pubs closing a week, up from the previous average of 36, we are seeing this trend continue to gather speed,” Broome said. “The industry has been ravaged by a combination of negative factors over recent years, and the recession is likely to put further pressure on an already difficult trading environment. We expect our recent prediction of 4000 pub closures by 2010 to sadly remain on course.”
A consumer poll, however, has indicated consumers are less willing to reduce their visits to the pub, than they would cut down on takeaways, fast food and eating out.
