UK's casual dining restaurant numbers dip for first time in nine years: report
Pubs and bars are faring better.
Britain’s supply of casual dining restaurants saw its first decline this decade in 2018, as a sustained decrease in the wider licensed sector continued.
A new report by CGA and AlixPartners revealed that Britain had 5,780 managed restaurants in December 2018 — 27.3% or 1,241 more than just five years ago. But casual dining brands, they say, appear to have "peaked", with numbers slipping by 0.1% from December 2017.
The news follows rising concerns about over-capacity in the restaurant sector, as well as mounting pressures on property, people and food costs and Brexit-related dents to business confidence.
The report added that there was a 0.9% drop in the total in the year to December 2018 outside the M25—but inside it there was a 1.5% rise. High streets, where over-supply has been most notable, saw managed restaurant numbers dip 1.1% year on year, whilst suburban areas recorded 2.2% growth.
“The boom in managed restaurants has been one of the British economy’s great success stories of the past decade. But after a string of closures and CVAs in the casual dining sector in the last 12 months, the sector is now in net decline—albeit a very modest one. We can expect to see further contraction in numbers over the course of 2019," CGA vice president Peter Martin explained.
Meanwhile, pubs and bars are faring better—especially those generating the majority of sales from drinks. The report found closures of drink-led pubs and bars averaged 3.6 a day in the last five years, but in the last 12 months the pace has slowed substantially, to 2.2 a day.
“The more positive outlook for pubs and bars is reflective of the buoyant M&A activity in the sector. Trade and private equity buyers are turning their gaze to pub and bar assets. This reflects not only the saturation of certain parts of the restaurant market, but also the combination of reduced supply and the continued rise of quality wet-led pub and bar operators. These factors have been driving strong performance in a challenging environment,” AlixPartners managing director Graeme Smith said.
