Against a backdrop of rising household consumption, increasing national wages and falling unemployment, Horizons’ managing director Peter Backman forecast a value growth of over £10bn for the UK’s foodservice sector by the end of 2019.
Speaking yesterday [10 March 2015] at the company’s Annual Briefing, held at the London headquarters of global law firm Dentons, Backman said that in 2014 the value of the foodservice sector saw a nominal growth (including inflation) of 3.8%, with real growth at 2.9%, giving it a current value of £46.6bn.
“We expect the market to continue to grow over the next five years, and factoring in the impact of inflation, it is likely to reach a new value of £56.3bn by 2019,” he told the audience of operators, analysts and suppliers.
“More robust levels of consumer consumption have been prompted by the fact people are now less exposed to high levels of borrowing, are more certain of their jobs, and are buoyed by low inflation. This is great news for the eating out sector – and while it’s not racing ahead, it is growing at a higher level than we have seen since before the economic downturn,” he said.
“Overall things are looking good for the UK’s foodservice market with group operators driving much of that growth, in particular pizza delivery outlets, managed branded pubs, pub restaurants and coffee shops.”
Margins were improving, he said, giving operators money to invest, evident in a number of businesses changing hands, rebranding or expanding.
“The use of discounting and money-off vouchers has levelled off, with operators using them much more tactically to support particular events or occasions, such as Mother’s Day or Valentine’s Day,” Backman added.
Horizons’ director of marketing & business development Emma Read outlined the fact that average spend on a three-course meal has risen in the past year to £14.48. Another ongoing trend is that 35-44 year olds are eating out more than ever. “We are now also catering for a slightly older average customer, whose needs and habits have changed and vary depending on the occasion, the location and the time of day.”
Read said that current food trends included the increasing number of regional American dishes on menus as well as those of world cuisines such as Vietnamese, Peruvian and Egyptian. There was also a trend towards catering for health and well-being considerations as well as offering more indulgent dishes.
Horizons’ director of services Nicola Knight highlighted some of the smaller chains set to become high street brands of the future from Horizons’ Ones to Watch survey, including Fuel Juice Bars, Dunkin’ Donuts, Abokado and Tortilla Mexican Grill.
“Juice bars, Mexican and specialists such as Pieminster and Dunkin’ Donuts are growing their estates and there is still plenty of room left for growth in the coffee sector,” she said. “In terms of regional expansion the UK’s hotspots for development include Leeds, Manchester, Bristol and some of the UK’s market towns, along with London.”
One of the growing specialist operators is Belgian waffle brand Wafflemeister, currently with 11 outlets and actively seeking franchise partners. CEO and founder Alex Trouillier said the company had deliberately chosen sweet waffles, rather than savoury, to cater for consumers who wanted to treat themselves in an intelligent, relatively low-calorie way. “That sugar craving is not going to go away,” he said.
Like other panellists, his focus was on finding the right partners to work with. “Success depends on hiring the right people – the future of our business depends on people we haven’t even met yet,” he said.
Catherine Roe, CEO of contract caterer Elior agreed. She said it was important to keep a simplicity in the business, keep employees engaged, maintain a full work force with good inductions for new recruits, and value your staff. “Focus on the customer, serve them well and get regular feedback from them on how you are doing,” she added.
The advice from lawyer Babette Marzheuser-Wood, a partner in the Franchise Group at Dentons, was to “protect your intellectual property and register the trademark – be careful about telling people that secret recipe!”.
Horizons’ MD Peter Backman rounded off the event with the following message to operators: “Keep in touch with the way people are eating out now and the products they want – the market is changing all the time and if you don’t offer what they want, someone else will.”
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For more details or comment please contact Linda Pettit at Tilburstow Media Partners on 01342 832866 / 07973 789853 or email linda@tilburstowmedia.co.uk. Alternatively, contact Peter Backman on 0844 800 0456 or 07785 242809 or email at peter.backman@hrzns.com.
Editor’s Note
Horizons helps its clients make better business decisions by providing accurate and detailed information about the foodservice market, its trend, and opportunities. The company provides consultancy services, workshops and statistical information based on its model of the sector and database of key accounts across Europe.
