Mid-market casual dining faces ongoing struggle as QSR continues to grow

The specialist property advisor’s Business Outlook 2024 report reveals that more than 50% of consumers now favour a visit to a pub, quick service restaurant (QSR) or takeaway over a dine-in restaurant as they search for ‘value and convenience’.

As a result, the QSR space is experiencing an ‘upwards growth trajectory’, with delivery demand ‘remaining steady’.

Looking more broadly at the restaurant market, Christie & Co notes that the industry has been undergoing a ‘period of transformation’ driven by pre-Covid overexpansion, challenging trading conditions and changing consumer habits.

More than 2,000 businesses closed over the course of 2023, with closures reaching a peak of five a day in the first quarter of the year.

“It’s clear to see it was a difficult year for restaurants,” says Simon Chaplin, senior director of pubs, restaurants and franchise at Christie & Co.

“However, this may have represented a catch-up year from a tide that started in 2018.

“Such adversity often sees the best look to innovate and we are already seeing operators, large and small, review their business, tighten up on costs and fine tune their audience.

“This is most evident in the QSR (quick service restaurant) market, where we have seen sustained growth since Covid, as new and exciting franchise brands bring their offer to the UK market.

“As a result, the consumer will benefit which will keep them coming out for more, breathing life back into the industry.”

According to the report, the total value of restaurants sold by Christie & Co in 2023 was £6.75m, with 85% of the sales being leases.

The franchise market experienced ‘increased activity’, with Christie & Co assisting several key domestic and international market players with both franchisor disposals and franchisee searches.

These include Sushi Shop and Chozen Noodles, as well as international brands Carl’s Jr, Paulaner and Bonchon that are looking to enter the UK market.