Casual dining visits up by 7%, report says
The sector now makes up of 5% in the whole out-of-home (OOH) foodservice industry.
The casual dining sector continues to grow in Britain as it gained an extra 35 million visits or a 7% increase for the year ending June 2018, according to the latest study by The NPD Group.
The market research company says its growth rate is four times faster than the overall out-of-home (OOH) foodservice industry.
One of its drivers is positive consumer recommendations on social media or review sites. It went up to 38% year-on-year, three times faster than the OOH market.
“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,” Dominic Allport, NPD Group insights director, said.
“One of the problems has been the tendency for some operators to scale up too quickly, with ‘quantity of sites’ outweighing ‘quality of sites’. But the biggest issue is the pressure on profit margins with business rates, rent, food and labour all costing more in an over-supplied market.“
Allport also reported that one of their solutions is expanding outside London where the costs for the sites are lower. An additional 23 million casual dining visits was experienced in Southeast and Southwest of England whereas London only had an extra 3 million.
The family and the young adult segments contributed to its growth. Family visits grew to 11% while people aged 16-24 are up 15% and a 9% growth among those aged 25-34.
Other strategies within the casual dining sector includes delivery services, which experienced a 9% increase year-on-year. The use of meal deals or promos went up to 16% year-on-year while order ahead/click and collect visits rose to 25% year-on-year.
They are also expanding their breakfast options as it is revealed to be growing 10 times greater than the breakfast growth in the whole OOH market.
“The continued growth of casual dining in Britain is good news for our foodservice industry. The ability of delivery platforms to reduce barriers to entry has particularly helped small brands to expand,” Allport further commented.
However, he also warned that there will be more closures as they are still most at risk due to costs pressures.
