Competition for restaurant sites to heat up in 2016

By Emma Eversham contact

- Last updated on GMT

Competition for sites is expected to heat up this year
Competition for sites is expected to heat up this year

Related tags: Minimum wage

The disparity between the supply of and demand for restaurant sites will remain in 2016 and will stretch to more parts of the UK as the market continues to swell says property agency Christie & Co. 

According to its Business Outlook 2016 report, the restaurant sector is predicted to grow by about 10 per cent this year, with the fast-casual sector set to fuel the growth. 

However, Simon Chaplin, head of pub and restaurants at Christie & Co warned restaurant operators to expect the widespread difficulties in finding suitable sites to continue as growing brands with more available cash start investigating options outside of London. 

He said: "The growth of the restaurant sector in northern cities such as Manchester and Leeds is now spreading to other cities, and pressure on space means smaller market towns are seeing branded restaurants coming into the area. We are also seeing London-centred brands heading into the regions. 

"One threat for regional cities, however, is that rates and rent increases are coming through. The London market is overheating, some sites are becoming unviable, and some brands need to expand 20 per cent a year to keep investors happy, but they may not find the opportunities in the regions that existed three years ago – there have been examples of £75/sq ft rent outside London."


Other threats to growth include the introduction of the National Minimum Wage in April which some fear will have an impact on margins. 

The report also showed a slowing in the average price rise of restaurant property - up 9.9 per cent in 2015 compared to a rise of 11 per cent in 2014.   

Chaplin predicts that entrepreneurs will continue to expand new brands and pubs will win back their share of the casual dining market with growth also to be found within the coffee shop sector. 

“2015 brought a wider variety of new restaurant concepts to the market, characterised by the innovative and inspired. As consumers continue to demand more choice, better quality and good service, restaurants numbers will continue to swell.

“The rise of the street food phenomenon was a big factor in 2015, and, as a result, the fast casual sector is the fastest growing at 7-8 per cent a year. Established brands are now trying to replicate this success as they realise customers want something different and to be challenged. Next year we will continue to see entrepreneurs expand new brands from around the globe.”

Related news

Show more

Related products

show more

Reduce costs with Access Procure Wizard P2P

Reduce costs with Access Procure Wizard P2P

Access Hospitality | 02-Nov-2018 | Technical / White Paper

Are there ways you could increase profitability and streamline processes? Access Procure Wizard’s purchase to pay system is the best in class and helps...

Technology at the table feeds profits

Technology at the table feeds profits

Zonal | 18-Oct-2018 | Research Study

Here at Zonal we place high emphasis on researching into the everchanging consumer wants and needs to make sure we are always ahead of the curve with our...

Life is Better Filtered: The Collaborative Kitchen

Life is Better Filtered: The Collaborative Kitchen

Brita | 04-Oct-2018 | Technical / White Paper

Many would argue that the back of house operation is the backbone of all hospitality establishments and for a business to succeed, it needs to be operating...

Related suppliers


Follow us

Hospitality Guides

View more

Featured Suppliers

All suppliers