Key Note Media Centre
Restaurants Industry Grows in 2011 in Spite of Consumer Cut-backs
According to Restaurants, a new Market Report Update by market intelligence provider, Key Note, the industry rose by 1.7% to a value of £26.18bn in 2011. The performance of the quick service sector was the primary reason behind this growth, as the sole sector to have increased in value over the course of the year.
Dining out is popular in the UK; consumers enjoy socialising in public places and conversing over food and drink. The economic crisis, however, is forcing them to cut back on their spending and limit their number of outings. Moreover, when they do go out, consumers are going to places where they will get the best value for their money.
Although on the whole the restaurants industry is proving resilient to the economic crisis, some businesses have been unable to weather the storm. More venues closed in 2011 than in 2010. Restaurateurs are finding it difficult to strike the right balance between rising food and energy costs, and appealing menu prices for customers. Moreover, instead of sharing the burden with consumers, they are choosing to foot the bill themselves in order to retain their customer bases.
Key Note attributes the growth of the quick service sector to the fact that it is the cheapest of the three sectors and because it is a convenient mealtime solution for busy consumers who want to chomp-and-go. The quick service sector now accounts for 44.1% of the restaurants market, having increased its market share year-on-year since 2007.
The casual dining sector is becoming increasingly made up of chains, which are better able to cope with the economic crisis as a result of their size. Its value declined by 0.5% in 2011 to £8.98bn and Key Note attributes this fall to the sector's reliance on vouchers. The value of pub restaurants also shrunk in 2011, by 1.8% to £5.66bn. However, this was the category's smallest decline over the past 5 years. More and more, pub restaurants are offering customers cheap meals at breakfast, lunch and dinner. This has helped to slow the downfall of the category.
Following an analysis of data, Key Note concludes that the restaurants industry will grow continually over the next 5 years. 2012, in particular, will be a profitable year for manufacturers, as consumers enjoy holidays and events, including the Queen's Diamond Jubilee and the 2012 European Football Championship. The influx of tourists, as a result of the London 2012 Olympic and Paralympic Games is also expected to boost sales. The quick service sector will continue to grow ahead of the other two sectors, though these will return to growth. Key Note calculates that the restaurants industry will be worth £29.38bn in 2016.
Press enquiries: Jack Sykes at Key Note at firstname.lastname@example.org or 0845 504 0452. Press/review copies of the report are available on request.