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Wed 18th Jan 2017 - Foodservice visits forecast to grow 0.4% in 2017, City Pub Company December sales up 47%
British out-of-home foodservice visits forecast to grow 0.4% in 2017: The British out-of-home (OOH) foodservice market could grow visits by as much as 0.4% in 2017 to 11.34 billion and a further 1.6% in 2018 to 11.52 billion, according to new research by insights firm NPD Group. This follows the 1.1% actual growth in out-of-home foodservice visits in Britain in 2016 to year ending November 2016, the third consecutive year the sector has recorded a rise in visits. However, NPD Group’s forecasts assume a “soft Brexit” environment rather than a “hard Brexit” effect. NPD Group has also done forecasts for a “hard Brexit” scenario, which would see 2017 visits dropping by 0.2% to 11.28 billion and a slightly smaller increase in 2018 of 1.3% to 11.43 billion. Total OOH spend to year ending November 2016 was £53.46bn, in line with NPD Group’s prediction last year. For 2017, NPD Group is predicting total OOH spend of £55.54bn, up 3.9% on 2016 and then a further 3.7% increase in 2018 to £57.60bn. The above figures assume a “soft Brexit” environment – NPD Group’s “hard Brexit” spend figures are £55.30bn for 2017 (up 3.4% on 2016) and £57.17bn for 2018 (also up 3.4% on 2017). NPD Group believes foodservice operators will do well despite the challenges of lower consumer confidence, cost increases from wages, inflation, weaker sterling and growing business rents. The reasons they will do well include their track record of changing their menus, investing for the future and doing all they can to really understand their customers. Cyril Lavenant, NPD Group foodservice director UK said: “We have done ‘soft Brexit’ and ‘hard Brexit’ forecasts for 2017 and 2018. The good news is there’s a relatively narrow difference between ‘soft’ and ‘hard’ visit estimates for the next two years, even though Brexit clearly began to slow the pace of growth in 2016. For 2017, the difference in visits is +0.4% (‘soft’) versus -0.2% (‘hard’) and there’s a similar story for 2018 with a variation of +1.6% versus +1.3%. So with many parts of the British foodservice market showing clear signs of strength and resilience, we don’t anticipate a sharp drop, either in a ‘soft Brexit’ or ‘hard Brexit’ environment.” NPD Group sees quick-service restaurant (QSR) visits rising to 5.96 billion in 2017 (on a ‘soft Brexit’ basis) and to 6.11 billion by end of 2018. There were 5.84 billion visits in the QSR sector in 2016. QSR has grown consistently in recent years, even through the 2008 recession, as this segment is more affordable, chain-driven and consistently injecting fresh investment. Within QSR, one of the strongest increases is likely in the quick-service pizza/Italian channel, with visits rising 3.5% from 0.24 billion in 2016 to 0.25 billion in 2017, and a further 3.5% to 0.26 billion in 2018. Casual dining operators enjoyed 0.51 billion visits in 2016. NPD Group is predicting visits will increase 3.4% to 0.53 billion in 2017 (on a ‘soft Brexit’ basis) and a further 3.4% in 2018 to 0.55 billion. NPD Group said with most of Britain’s casual dining business having taken root within the M25, there is abundant room to grow elsewhere in Britain and that capacity will support the sector well. Lavenant added: “Foodservice operators throughout Britain are well aware of the challenges they face. Many are taking all the right steps to strengthen their businesses and profit from the expected growth in visits and spend.”

City Pub Company reports December sales up 47%, exchanges on 30th site: Independent pub operator City Pub Company has reported sales increased 47% during the five weeks to 1 January 2017, compared with the corresponding period last year, achieving sales of more than £1m in one week for the first time. The company said Christmas trading was superb throughout the estate “largely as a result of better planning and the pubs being better established in their local communities”. The company has also exchanged on its 30th acquisition, with completion due later this month. The group plans to have 35 sites open by the time of its intended listing on AIM at the end of 2017. City Pub Company chairman Clive Watson said: “City Pub Company traded brilliantly over the festive season, demonstrating the progress our pubs are making in the communities they serve. We achieved sales of more than £1m sales in one week for the first time. We have strong momentum moving into 2017, both within our existing estate and with five newly acquired pubs coming on stream. With a very focused, talented, dedicated and loyal group of employees, we are confident we can continue to build profitably on last year’s success.”

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