Eating out sector returns to growth but uncertainties remain, says Horizons

Total sales for the UK’s restaurants, hotels, quick service dining outlets, cafés, contract caterers and takeaways were up by 2 per cent during 2014, with similar growth anticipated for 2015.

However, Horizons said fragile consumer confidence – brought about by “current global uncertainties” such as the Ebola virus, the threat posed by Islamic extremists, the UK’s presence in Europe and the outcome of the general election in May – limited any projected growth in foodservice sales.

“It won’t be a meteoric rise this year, but sales are likely to see steady growth if consumer confidence continues to improve, prompting a rise in average spend,” explained Horizons’ managing director Peter Backman. 

Takeaway growth​ ​

Earmarked for growth are limited product takeaways such as juice bars, Mexican street food and bakeries and coffee shops.

According to Backman, these generally occupy small outlets in high traffic areas and mean that consumers can satisfy their need to buy food when they want, where they want.

He said: “We envisage this trend continuing as entrepreneurial operators come up with novel ideas for brands.

“It is these operators who will bring new food trends to the market by renting small, cost-effective spaces that larger brands can’t.” 

Market acquisition​ 

The Horizons research also found that bigger eating out operators are likely to grow further through acquisition this year, with smaller players the inevitable targets.

Backman said: “The larger players are now at the point where they will start to ask where further growth will come from.

“The eating out market in some sectors is reaching saturation and overseas expansion is difficult for most, so acquisition through 2015 and into 2016 is the obvious answer.”

He added: “Investors are much keener on the eating out sector than they were, and obtaining finance for deals will get easier.”