The latest Eating Out in the UK report revealed an expected increase in the value and number of outlets of the market as a whole, but further pressure for the restaurant and pub sectors.
While the overall industry should reach over 339,000 units by 2017, increasing by a CAGR of 1% from the current 329,400 – mainly boosted by coffee shops – restaurants will see their numbers drop from 33,558 to 32,869, and pubs from 50,751 to 48,856.
Despite this, value for the two segments is expected to increase, from £20.1bn to £20.6bn for restaurants, and from £17.4bn to £19.4bn for pubs and bars, over the 3 year period to 2017.
Value growth will most likely come from increased eating out spend and frequency spurred by the economic recovery.
Eating out frequency and ageing demographic
Allegra explained that participation in the eating out market is increasing, with 91.7 per cent of consumers saying they have eaten out at least once in the last quarter.
However, frequency is in decline, having dropped 1.8 per cent for breakfast, 2.2 per cent for lunch and 6.7 per cent for dinner between Q2 2013 and Q2 2014.
There are significant frequency differences between regions, with diners in London eating out twice as often (12.05 meals a month) as those in Wales (6.06). The capital also makes up 20 per cent of the national eating out spend.
Looking specifically at pubs and restaurants, frequency has grown for breakfast and lunch, but dropped for dinner.
And although they spend less than their older counterparts, 18 to 24-year-olds form the biggest chunk of the eating out market, eating out almost three times as often as the over 70s.
“With the ageing demographic trends, the industry faces significant long term challenges in encouraging the retention of more youthful eating out behaviours,” the report said.
Pressure on independents
The eating out market is currently worth £83bn (with expected growth of 2.9 per cent for 2014), including £61.2bn from hotels, pubs and restaurants (which form 171,000 units in total). Restaurants represent 50 per cent of the sector’s turnover, with independents forming the largest sub-segment.
However, independents have seen year-on-year decline as consumers are enticed towards ‘more reliable’ brands, according to Allegra’s director of insight Steve Gotham.
Pubs on the other hand are ‘set for a golden period of turnover growth’, reaching a compound annual growth rate (CAGR) of 4.9 per cent between 2014 and 2017, thanks to their increased focus on food.
Pubs ranked first in the type of establishment consumers visit most frequently, with 21 per cent of survey respondents saying they eat at their local pub at least once a month. They were followed by McDonald’s at 18 per cent and Costa at 15 per cent.
The Eating Out in the UK report includes insight from 2,000 consumers together with data captured from the Allegra Eating Out Panel, which surveys 6,000 consumers each month.
The report is available from Allegra Foodservice on Monday 22 September.