Casual dining brands show growth despite high street woes

Casual dining has continued to grow with visits up 7%, latest figures from global information company The NPD Group have shown.

The firm said many operators – especially newer, challenger brands – are continuing to focus on expansion despite high-profile closures and restructuring that some have described as the ‘Casual Dining Crunch’.

For the year ending June 2018, there was an extra 35 million visits to British casual dining restaurants compared with the previous 12 months. Casual dining now accounts for 5% of visits in Britain’s eat-out or out-of-home (OOH) foodservice industry.

While the overall OOH market suffered a decline of 43 million visits, casual dining chains grew visits by 34 million. Britons spent £6bn on casual dining in the year ending June 2018, which was around 11% of total OOH spend. Over the same period, spending on casual dining restaurants grew four times faster than the total market.

The research suggested a move away from London’s restaurants as for the year ending June 2018, there were only an additional three million casual dining visits in the capital versus the previous year, compared to 23 million more in the south east and south west of England.

Delivery continues to grow across the casual dining market (up 9% YoY), order ahead/click and collect visits are also up (25% YoY), as are visits using meal deals or promotion (up 16% YoY).

Casual dining restaurants are also benefiting from consumer recommendations with visits driven by positive comments on a word-of-mouth basis, on social media, or via review sites up 38% YoY, more than three times faster than for the wider market.

Some casual dining restaurants are trying to expand beyond dinner into other opportunities such as breakfast (up 24% YoY within the casual sector), and snacking (also up 24% YoY). The growth rate casual dining operators are enjoying with breakfast is 10 times greater than breakfast growth in the wider OOH market. Family visits grew by 11%, almost three times faster than family visits across the overall OOH market. Visits from 16-24s were also up by 15% YoY, and 9% among 25-34s.

Dominic Allport, insights director with The NPD Group, said: “Casual dining restaurants remain one of the key growth stories in Britain’s OOH foodservice market, despite the high-profile closures, rescues and restructuring seen in this sector in recent months. But while the market is expanding, success is not guaranteed.

“One of the problems has been the tendency for some operators to scale up too quickly, with ‘quantity of sites’ outweighing ‘quality of sites’. Some of the newer brands are also failing to set themselves apart from competitors, leaving consumers with the sense they are getting similar menus, similar venues and similar customer experiences.”

He added: “The biggest issue is the pressure on profit margins with business rates, rent, food and labour all costing more in an oversupplied market.”

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