Fast food gains market share from traditional restaurants, finds report

By Lorraine Heller

- Last updated on GMT

Related tags: Fast food, Restaurant, Take-out

More footfall at quick service restaurants
More footfall at quick service restaurants
The restaurant sector is showing some signs of recovery, although full service restaurants continue to suffer in favour of fast food options, finds a new study.

According to data from NPD’s Crest Barometer, the UK restaurant market grew by 1.4 per cent in the last quarter of 2010, despite a tough year and harsh weather. The increase, said the group, was mainly driven by more individual spend.

However, this was largely boosted by more fast food spend, while traditional restaurants continued losing share.

Value for money continues to be a priority consumers, with people still careful where they spend and still expecting discounts, said NPD.

“Consumers are still cautious about returning to the top end of the commercial restaurant market,” Guy Fielding, director of GB Foodservice at NPD.

“Only when they become more confident about the economic recovery will the traffic for these outlets begin to return to the levels of three or four years ago. At the moment diners are seeking value - it is almost as if they expect the same deals in restaurants as they might get in supermarkets.”

Quick service popularity

NPD found that the quick service restaurant sector continued to grow, primarily boosted by fast food and coffee shop sales, where traffic increased by 8 per cent during the year.

Good news for pubs

The report also found that pubs “are definitely turning a corner”, with the sector as a whole seeing more traffic in the last quarter.

However, this was driven by the branded operators rather than the independents, who “are still struggling”.

Full service restaurants struggle

NPD said there was “little evidence” to suggest there was a recovery in traditional full service restaurants, which typically have the highest individual spend.

The average annual decline in this sector is around 3 per cent, but the fourth quarter of last year was particularly tough, recording a decline of 5 per cent.

“As the economy remains a concern, and in particular with rising unemployment, it is difficult to see the full service channel transform itself, especially as the average spend is so much higher than in pubs and the Quick Service sector,” said Fielding.

“Value and promotions will be at the forefront of consumer’s minds through 2011 and commercial restaurants – whichever type of food they serve – will need to be mindful of this throughout the coming year.”

Related topics: Trends & Reports, Restaurant, Pub & Bar

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