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Tue 4th Sep 2018 - Casual dining continues to grow despite reported woes
Casual dining continues to grow despite reported woes, spending rises four times faster than overall market: Casual dining is still continuing to grow in Britain despite a number of high-profile closures and company restructures, according to insights firm The NPD Group. For the year ending June 2018 visits to British casual dining outlets were up almost 7%, equivalent to an extra 35 million visits compared with the previous 12 months. Casual dining now accounts for 5% of visits in Britain’s eat-out or out-of-home (OOH) foodservice industry. While the overall OOH market suffered a decline of 43 million visits in the year to June 2018, casual dining chains grew visits by 34 million. Britons spent £6bn on casual dining in the year ending June 2018, about 11% of total OOH spend. During the same period, spending on casual dining restaurants grew four times faster than the total market. The NPD group said there were signs the push to expand casual dining had become less focused on London, where 2017 business rates revaluations have had a sharp impact on many operators. For the year ending June 2018 there were only an additional three million casual dining visits in the capital versus the previous year, compared with 23 million more in the south east and south west of England. The casual dining sector is also using a variety of strategies to expand, The NPD Group said. Delivery continues to grow strongly across the casual dining market (up 9% year-on-year), order ahead/click and collect visits are also up (25% year-on-year), as are visits using meal deals or promotions (up 16% year-on-year). Casual dining restaurants are also benefiting from consumer recommendations with visits driven by positive comments on a word-of-mouth basis, on social media, or via review sites up 38% year-on-year – more than three times faster than for the wider market. Some casual dining restaurants are trying to expand beyond dinner into other opportunities such as breakfast (up 24% year-on-year within the casual sector), and snacking (also up 24% year-on-year). The growth rate casual dining operators are enjoying with breakfast is three times greater than breakfast growth in the wider OOH market, said The NPD Group. It added casual dining has a strong following in the family segment. Family visits grew by 11% for year ending June 2018 – almost three times faster than family visits across the overall OOH market. Consumers are generally going to casual dining restaurants because they want “something different” and are attracted by the “quality of the food”, The NPD Group said. Both of these motivators are more pronounced among casual dining customers than for the OOH market as a whole. Young adults/millennials are also loyal fans of casual dining restaurants. Visits from 16 to 24-year-olds were up 15% year-on-year, and 9% among 25 to 34-year-olds. Visits by both groups to casual dining restaurants are growing faster than with other OOH outlets such as quick-service restaurants. The NPD Group insights director Dominic Allport said: “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. One of the problems has been the tendency for some operators to scale up too quickly, with ‘quantity of sites’ outweighing ‘quality of sites’. Some of the newer brands are also failing to set themselves apart from competitors, leaving consumers with the sense they are getting similar menus, similar venues and similar customer experiences. 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. 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. Operators can support further growth by building strong consumer awareness, maximising automation to reduce costs, maintaining prudent supply chain management, and driving off-peak visits through flexible pricing. But growth brings the risk of saturation and for that reason it is likely the casual dining boom will see further closures and rescues. Casual dining chains are most at risk from the ‘perfect storm’ of oversupply, lack of differentiation and sharp exposure to inflation, particularly labour costs. A chain that deals with this by cutting prices to boost visits will be the one that’s most at risk.”

Food safety technology firm Navitas secures £745,000 investment: Food safety technology company Navitas Digital Safety has secured £745,000 investment by independent infrastructure, private equity and investment manager Foresight Group through the Midlands Engine Investment Fund (MEIF). Leicester-based Navitas provides hand-held devices that work with software to monitor appliances, check food temperatures and feed data to a cloud-based programme, cutting “outdated paper-bound procedures”. The company will use the finance to bring its manufacturing in-house and add ten staff to its workforce. Navitas group chief executive Ben Gardner said: “This injection of capital will allow us to realise our expansion plans by investing in manufacturing and research and development. By also strengthening our talented sales force we can ensure Navitas technology is rolled-out to huge UK brands and international markets.” Ray Harris, MEIF principal at Foresight, added: “A company that could be instrumental to the digitisation of an entire industry should not be held back by lack of funding. Alongside the investment, we worked with the firm to appoint a new chairman, Bryan Taylor. Bryan has 20 years’ experience with venture-backed SME businesses mentoring executive teams through periods of sustained growth. Navitas perfectly represents the type of business the MEIF would like to back – a young, innovative organisation that needs a financial push to help realise its full potential.”

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