Thu 8th Sep 2016 - Market Growth Monitor – managed restaurant groups’ sites number up 5.5% year-on-year Market Growth Monitor – managed restaurant groups’ sites number up 5.5% year-on-year: Managed restaurant groups continued to see strong growth in the 12 months to June this year, with numbers of sites up 5.6% year-on-year, according to the latest data compiled for the quarterly Market Growth Monitor from AlixPartners and CGA Peach. “That equates to a net addition of 284 new establishments, or more than five new openings a week – a performance that significantly outstrips the market,” said Peter Martin, vice-president of CGA Peach, the business insight consultancy that produces the Monitor in partnership with AlixPartners. “Small to medium multi-site operators have been particularly active on the openings front, with their dynamism in contrast to more staid, established independent operators, which have seen a decline in numbers. In the Asian arena, Thai brands such as Thaikhun and Busaba Eathai and Vietnamese concepts like Pho have drawn trade away from traditional Indian and Chinese establishments,” he added. It is not just casual dining that has benefited from the public’s search for new food and drink experiences. The managed branded food pub sector has remained buoyant too, largely driven by the conversion of existing sites to food-focused formats. Overall, numbers of food-led pubs grew 2.0% to almost 10,500 in the year to June – with managed pub groups, and in particular branded concepts, leading the way with an 8.7% expansion in the past 12 months alone. But, as the latest Market Growth Monitor also reveals, this upbeat growth comes against the background of an otherwise softer eating and drinking-out market. The slow-down in the overall UK economy seen in the run-up to the EU referendum is also reflected in the latest opening and closure numbers for licensed premises. The figures show Britain’s supply of licensed premises fell slightly by 0.9% in the 12 months to June – a small but significant movement on the 0.5% fall at the time of the last Market Growth Monitor in March. Drink-led venues continue to struggle in many parts of the country, and their numbers fell by 1.6% in the year to June, but perhaps more significant is the news that the country’s overall supply of food-led licensed premises, in contrast to the growth in managed restaurant chains, has fallen too, by 0.3%, due largely to a fall in numbers of independent single-site businesses. “All eyes are on the licensed property market to track the restaurant and bar industry’s reaction to Brexit,” said Paul Hemming, managing director of AlixPartners. “While the numbers revealed in this latest edition of Market Growth Monitor capture site movements in the months up to the historic vote, everyone is waiting to get an understanding of the real impact of Brexit before recommitting to their roll-out programmes. Trading immediately post-Brexit appeared robust but competition remains intense, and the market will continue to monitor developments in consumer leisure spending closely. However, for operators the most pressing impact comes from the fall in the value of sterling. Many menu items are imported, either from Europe or beyond, and the pound’s devaluation is likely to result in cost increases in the order of 15%, which will need to be built into site economics. Operators already absorbing the National Living Wage will inevitably take the opportunity to re-evaluate their plans. While many will remain committed to ambitious expansion programmes in the medium and longer term, everyone will be more cautious when evaluating new sites and current property deals. The Monitor had already seen a slowdown in the pace of new openings and Brexit uncertainty is likely to continue this trend.”