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Mon 25th May 2015 - CGA Peach – small branded chains grow outlets by 48% in three years
CGA Peach – small branded chains grow outlets by 48% in three years: Branded restaurant chains are showing the fastest growth in the food and drink market, with smaller chains under 25 outlets showing the fastest growth of all, according to Peter Martin, vice-president of CGA Peach, the pub and restaurant trade data specialist. Martin, speaking at a conference organised by Numis Securities in the City of London, said smaller brands, such as Leon, Benito’s Hat and Five Guys, had seen outlet numbers grow 48% since 2011. Medium-sized brands, with 25 to 99 outlets, such as Carluccio’s, Las Iguanas and YO! Sushi, had grown outlet numbers by 36%, while the biggest brands, such as Pizza Hut, Frankie & Benny’s and PizzaExpress, had grown numbers by 21%. “It’s the small entrepreneurs who are really driving growth,” Martin said. “This is an incredibly dynamic market.” An important growth area is in city centres, with a 6% increase in openings in the past year, he said. “What we are seeing is (the most) growth in the major provincial cities in terms of new outlets,” he said, with Manchester now having a higher growth rate than London in terms of new restaurant and bar openings, at 17% in the past four years, against 16% in the capital, with Cardiff city centre openings up 14% over the same period and Leeds city centre growth of 13%. These were mostly food-led outlets, Martin said, with food outlets in Manchester up 8% in the past year against a 1% rise in drink-led outlets, while London saw drink-led outlets stay flat while food-led outlets rose 4%. In Birmingham, drink-let outlets have fallen by 3% while food-led outlets are up 7%. Martin told the conference: “We think Birmingham will be the next Manchester. Increasingly the battlegrounds for new outlets and for consumers are in city centres.” The difference with city centres was in the mix, Martin said: “In London, 52% of premises are food-led, in the rest of the country it’s closer to 30%. Moreover, in London 51% of outlets are premium – in the rest of the country it’s nearer a third. More importantly, the rate of churn of outlets changing formats is much higher in London. London operators are quicker on their feet than the rest of the market. It’s competitive, and people are rising to that competition, by being creative and innovative.” Meanwhile, closures of wet-led pubs are being more than compensated by openings of food-led outlets, with the on-trade in Great Britain in slight growth in 2015, Martin said. While 21,000 drink-focused venues have closed over the past ten years, “pub closures are only one side of the story. Over that same time period we have had 8,600 openings of outlets with a more food-led focus.” This is fundamentally shaping the market structure, Martin said, with 63% of new openings being food-focused, either restaurants or pubs. “Basically, the licensed trade is moving from being a drink-dominated market to, increasingly, a food-driven business,” he said. This is also changing the sales mix of total beverage alcohol for the market. The drink-led outlets exiting the market have a wet sales mix where 60% was beers and ciders. The outlets coming into the market with a greater food focus see 60% of their wet sales sit away from beer and cider and more with spirits, wines and softs, illustrating the extra thought that needs to be put into ranging within those sectors, Martin told conference delegates. There has been a year-on-year decline in drinking venues of 2.9%, he said, and a 5.6% drop in wet-led pubs, from 28,600 to 27,000. “The move away from pure drinking-out occasions is continuing,” he said. But casual dining outlets have increased 8%, and there have been a net 2,000 new restaurants open in the UK in the past year.

Greene King Leisure Tracker – Easter drove increase in eating out in April: Brits celebrating Easter by enjoying a meal out prompted a peak in leisure spending during April, the Greene King Leisure Spend Tracker has shown. The latest report shows Brits spent 4% more, £87, going out to eat compared to the same month last year, and Easter was the major driving force. Households are continuing to allocate more cash towards eating out on special occasions, such as Easter, as they enjoy increases in disposable income, following depreciation in food costs and falling oil prices in 2015. Fiona Gunn, Greene King’s marketing director said: “Special occasions and landmark events, such as Mother’s Day and Easter, are influencing how people choose to spend their money on leisure. Following the recession, consumers are increasingly aware of the importance of budgeting and keeping an eye on spending. Consumers continue to find the cash for big events and the leisure industry is still dominated by important annual celebrations. It will be interesting to see how this trend continues over the course of the year.” April saw an increase in spending on eating out of 12% compared to March as households splashed out on Easter dinners over the long weekend. This drove an increase in total leisure spend of 10% in April versus March. There was no change in total leisure spend versus last year indicating that allocation of spending rather than volume of spending is the key change. Drinking out spend decreased 4% year-on-year, following a return to growth last month. Household spend in London and the South East increased just 1%, offsetting a small fall in the rest of Great Britain of 1%. Other leisure, which includes pursuits such as the cinema, live sports events and museums, saw a strong recovery in spend, down just 3% compared to last year, with a strong 9% increase versus March. Gunn added: “With comparatively more live football matches and more popular movies released, live sport events and the cinema certainly benefited from the increased spend during April.” Regionally, London and the South East saw a small growth in spending, of just 1%, which counterbalanced the small decrease in the Rest of GB. This demonstrates the continued imbalance in spending power between the North and the South of the Britain. While the difference is not significant enough to indicate a widening gap in financial environments throughout the country, London and the South East remain the most popular location for leisure spend.

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