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Thu 14th Jun 2018 - NPD Group – eating out decline mirrors behaviour of last recession, Hart brothers smash crowdfunding target
NPD Group – eating out decline mirrors behaviour of last recession: Total visits in the out-of-home (OOH) foodservice market dropped 1% in the first quarter of 2018 versus the same quarter a year earlier, according to insights firm The NPD Group. That 1% decrease is equivalent to 28 million visits, or 112 million on an annualised basis. In the first quarter of 2018, breakfast was down in visit terms by 1.6% against the same quarter a year earlier and has now registered its second quarter of declining visits following more than seven quarters of growth. The 5.1% drop in lunch visits seen in the first quarter of 2018 against the equivalent quarter in 2017 marks the third quarter of decline for this daypart in the past year after six quarters of growth. The NPD Group said this pattern of decreasing foodservice visits was last seen at the start of Britain’s 2007/2008 recession. Dinner visits within the OOH foodservice market have been in decline for a long period. For the year ending December 2017, OOH dinner visits were down 2.3% versus the same period two years earlier (year ending December 2015). Dinner frequency is also down with consumers averaging 61.2 dinners in the past 12 months (year ending March 2018), down 3.5% against the previous year. Lunch frequency decreased by 4.8% year-on-year (from 83.1 to 79.1). The NPD Group said in the 2007/2008 recession, consumers very quickly changed their consumption behaviour and this resulted in a dramatic decline of 510 million OOH visits annually by 2010. It added the last recession was an opportunity for the industry to reshape its offering to consumers in terms of quality, choice and the overall customer experience. Despite that effort, The NPD Group said the British foodservice market has not fully recovered from the 2007/2008 recession as the industry is still 370 million visits smaller each year than 2008. The NPD Group is advising foodservice operators in the UK to respond to the changing business environment by gaining the best possible understanding of core customers, by engaging loyal customers through promotions or events that make them feel “special”, and by encouraging new customers to make return visits. NPD is emphasising the need for operators to offer value for money, the highest quality food and beverages, and a strong customer experience. It is also suggesting ways that operators can better understand the strengths of their competitors. Cyril Lavenant, head of foodservice UK, said: “Although it is too soon to say whether we are currently in recession or not, there are clear warning signs. This time around, any sustained downturn would be more difficult to overcome because the foodservice industry is seeing fresh threats on top of existing operating and cost challenges. The casual dining sector, for example, is facing pressure from quick-service brands that are offering new food choices and newly refurbished modern outlets. Consumers also have a bigger choice than ever of operators offering healthier and lighter eating. It is likely that any new recession in foodservice will be harder to fight because the landscape is already intensely competitive. Eat-out visits began to slow down after the Brexit referendum in June 2016 and the consequences of this became clear from the second half of 2017 onwards, when the market started to lose visits after four years of growth. This trend has accelerated since the start of 2018 and now is the right time to sound a warning. The foodservice industry has so far demonstrated remarkable resilience in the face of tougher operating conditions, cost pressures and the uncertainty caused by Brexit. But since the end of last year we have seen some evidence of decline and operators will need to monitor carefully whether this downward trend continues. If it does, they will have to act fast to protect their business.”

Hart brothers smash debut crowdfunding target by raising more than £1.6m in two hours: Harts Group, the parent company of London restaurants Barrafina and Quo Vadis, has smashed its initial £750,000 fund-raise target on crowdfunding platform Crowdcube, raising more than £1.6m within the first two hours. The company is offering 9.12% equity in return for investment, with the funds to be used to support an expansion to King’s Cross. The brothers want to open a Barrafina site in Coal Drops Yard in October offering 34 covers inside, 60 on a terrace and a 20-cover private dining room. So far, 330 investors have pledged £1,606,510 and the campaign is “overfunding” with 30 days still remaining. The largest investment has been £150,000. It is the first time the company, which is led by Sam and James Hart, has offered a chance to invest in the business. Harts Group’s Ebitda growth has averaged 19.9% per year since 2013. In 2017, the company turned over £10.3m with Ebitda of £1.04m. The group owns Quo Vadis and Barrafina. Quo Vadis is a British restaurant offering produce-led food from much-respected chef Jeremy Lee. It also has a members’ club in Soho. Barrafina offers top-quality Spanish tapas, bar dining and private events spaces. The original Barrafina opened in Soho in 2007, with two more launching in 2014 and 2015 in Adelaide Street and Drury Lane, Covent Garden. In 2014, Barrafina Soho was awarded a Michelin Star, which been has retained. In 2016, Observer Food Monthly named Adelaide Street its restaurant of the year. The Harts took on Quo Vadis in 2008. In 2013, the restaurant was awarded the Tatler Award for best kitchen. The brothers also teamed up with Crispin Somerville to launch tortilla factory and taco bar Tortilleria El Pastor in Bermondsey in April.

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