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Wed 25th Feb 2015 - CGA Peach – eating out sector primed for growth
CGA Peach – eating out sector primed for growth: The eating and drinking out market is primed for growth in 2015 thanks to the popularity of flexible formats, barbecue food and craft drinks. But soaring property costs and the risk of saturation are putting the brakes on out-and-out optimism. Those are just some of the findings from CGA Peach’s exclusive Business Leaders’ Survey, which reveals the trends that will define the pub, bar, restaurant and the wider foodservice sectors in 2015. The fifth annual survey, sponsored by technology specialist Omnico, shows widespread optimism about trade in 2015, with nine in ten business leaders either very optimistic (25%) or fairly optimistic (66%) about their own business’ prospects. Operators with a heavy concentration of sites within the M25 tend to be more optimistic – as do newer companies. But confidence is tempered by three key concerns: around property, market saturation and staff costs. Nearly three in four leaders are either very concerned (38%) or fairly concerned (34%) by property and rental costs – numbers that are significantly up on last year. Concern is particularly acute in London, where prices have spiraled highest. Two thirds of leaders are meanwhile either very concerned (22%) or fairly concerned (42%) by saturation and possible over-supply, and similar numbers (18% and 46%) by staffing costs like wages and pensions. But there is better news on other fixed costs, with those expressing concern about energy prices and food costs both down this year.

Top trends identified by the Business Leaders’ Survey include:

Flexi formats and premium fast food are on the up: Two in three (66%) business leaders think all-day and flexible formats will thrive in 2015. Premium fast food, of the sort provided by Leon and Tortilla, is tipped by almost as many (61%).

Businesses have the tools to grow: Funding for expanding operators seems to be improving, with two in three saying access has improved significantly (32%) or marginally (35%) over the last year—and crowdfunding is a particularly popular source. That is fuelling expansion plans, and one in three (31%) leaders plans to open more then ten new sites in 2015.

Demand for transport hubs is soaring: Key UK travel centres like airports and train stations are identified as growth hotspots by more than three in four (78%) leaders. Town centre developments are the next best rated (56%).

There’s a buzz about barbecue: More than half (57%) of leaders think barbecue will make a big impact on the market in 2015 – up seven percentage points from last year.

Drinks are getting crafty: Asked about likely trends in drinks, nearly two thirds (64%) think craft beer will make a big impact this year. Next on the list is micro-distillery spirits (43%), which suggests that the interest in craft, niche and premium drinks is spreading to other areas of the market.

People are paramount: More than four in five leaders identify engaged staff (88%) and a high quality customer experience (83%) as very important operational issues. They are acting on it too: a similar proportion (79%) will increase investment in staff training this year, and only slightly fewer (73%) in customer service.

Value is about more than price: Three in five (61%) leaders think value for money is an important driver of consumer choice. But even more think the same of food quality (66%) and service (79%). With a little more money to spend than in recent years, consumers are becoming more discerning.

Branding is a challenge: A strong brand identity is vital in a competitive market, but two in five (40%) leaders think their business lags behind their competition on this front.

CGA Peach’s Peter Martin said: “After a relatively quiet few years, our Business Leaders’ Survey shows that eating and drinking out brands are firmly back in growth mode this year, building on the success most enjoyed in 2014, when most companies surveyed said they had met or exceeded their own expectations. But with competition fiercer than ever before brands will need to be on top of their game to thrive. Our poll of the UK’s brightest and best leaders reveals a wealth of opportunities out there – but a few pitfalls to be wary of too.”

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