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Tue 7th Apr 2015 - NPD – demand for value/quality means brands edging out independents
NPD – demand for value/quality means brands edging out independents: Competition from value-for-money foodservice chains has left Britain’s independent operators with a much lower share of Britain’s eat-out traffic - down from 53% at the end of 2008 to 43% at the end of 2014, according to NPD Group research. The research shows that, when Britons eat out, they are much more demanding when it comes to good prices and good quality than they were a few years ago. At the end of 2008, when grabbing a snack-on-the-go from a high street outlet or sitting down for a more formal meal, less than 9% of Britons said they chose an outlet for its good prices, but by the end of 2014 that had shot up to over 25%. The need for quality of food is higher too, with 21% of consumers saying this is why they choose an outlet compared to 17% six years ago. More consumers are also saying that their choice of outlet is affected by the availability of a ‘good variety of foods’ (12.6% year ending 2014 versus 11.4% six years earlier).The insistence on price and quality is taking a big bite out of the business of independent foodservice operators. Since 2008, independent high street restaurants and other local food outlets have seen sales drop by -22.8%. In stark contrast, restaurant chains have grown traffic by +15.5% in the same period. At the end of 2014, independents represented only 43% of eat-out traffic, down from 53% at the end of 2008, a steep drop of nearly ten percentage points. The British out-of-home foodservice market was worth £50.7 billion at the end of 2014, with chains taking £27.5 billion of this. “Britain’s independent restaurants and food outlets are struggling and the trend is likely to continue,” said Cyril Lavenant, NPD Group Director of Foodservice UK. “Most of them are not meeting expectations on price and quality or offering the full experience for which chains are known. The high street is more and more competitive and offers clear value for money while independent foodservice operators face more pressure than ever in this respect. Many of us know a restaurant or café or sandwich bar that has closed recently. To survive, independent outlets will need to offer good food and good service at a good price, bring more excitement and keep up with the current trends.” The decline in the fortunes of independent foodservice operators is evident across all age groups except for those over 65 years of age, showing how our traditional independent food outlets are struggling to maintain their appeal among younger customers and families choosing to eat out of home. Independents still rely on their customers making a choice for eating out based on convenient location (42%) and the sheer habit of visiting a favourite restaurant (27%). This makes them vulnerable to their chain competitors who are expanding their operations based on a more compelling formula of value for money, quality and variety of food. Part of the wider group of foodservice chains, Britain’s casual dining brands are doing especially well in terms of customer satisfaction. NPD said the brands – including Nando’s, Frankie & Benny’s, PizzaExpress, TGI Friday’s, Wagamama, Gourmet Burger Kitchen, Cafe Rouge, Zizzi, Bella Italia, Giraffe – offer consumers a fresh alternative to traditional fast food and focus more on food quality and service, as well as ambiance, décor and design. For the year ending 2014, casual dining brands were up +6.8% in traffic terms compared to the year before. Setting new high standards when it comes to eating out, Britain’s casual dining brands record a huge customer satisfaction score of 77% for ‘overall experience’.

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