Rising input costs are putting the brakes on pub and restaurant openings—but many managed and branded casual dining operators continue to expand.
That is one of the key messages from the eighth edition of the AlixPartners CGA Peach Market Growth Monitor, just published. The report provides authoritative data and extensive insights into Britain’s supply of pubs, bars and restaurants, and shows that the country’s number of licensed premises fell by 1.2% in the 12 months to March 2017.
The fall is the result of continued closures in the community drink-led pub and independent restaurant sectors. Like all operators in the eating and drinking out markets, they have been hit by a triple whammy of increased property, food and people costs in the last few years, exacerbated by uncertainty over Brexit negotiations.
But the AlixPartners CGA Peach Market Growth Monitor also highlights the success of multi-site managed pub and restaurant businesses, especially in the casual dining sector. The number of managed licensed venues—including cafes and hotels as well as restaurants, pubs and bars—rose by 2.5% in the year to March, while the number of managed restaurants has increased even more sharply, by 6.0% since March 2016. It is equivalent to 316 net new restaurants—or one new opening a day.
The figures confirm a long-term trend away from independently run restaurants and pubs and towards trusted, well-managed brands, especially in casual dining. Many of these—especially new and emerging concepts that started life in London—have been growing fast around Britain in the last year.
The Market Growth Monitor shows how regional UK cities have led the revolution in eating out. Manchester has increased its number of food-led licensed premises by two fifths in the last five years, while Newcastle, Leeds, Cardiff, York, Bath and Liverpool have all increased their supply by more than a quarter.
CGA Peach vice president Peter Martin said: “Our latest Market Growth Monitor shows that while the eating and drinking out markets are facing some unprecedented challenges—the vast majority not of their own making—managed groups remain very much on the front foot. Tired or complacent operators are struggling to stand still, but distinctive brands with great people, consistent delivery and the right price points continue to roll out. In the week of the General Election it is a timely reminder that ours is a resourceful, ambitious and economically vital sector.”
AlixPartners managing director Paul Hemming said: “There is no getting away from the fact that the eating out and drinking out sector is being challenged as never before. But despite these challenges, the AlixPartners CGA Peach Market Growth Monitor shows that many multi-site operators continue to expand, albeit in a more careful and considered manner than earlier in the cycle.”
The AlixPartners CGA Peach Market Growth Monitor is produced quarterly and is drawn from CGA’s Outlet Index, a comprehensive and continually updated database of all licensed premises in Great Britain.
For more information about the Market Growth Monitor, data or more granular analyses, please contact CGA Peach account director Jamie Campbell at jamie.campbell@cgapeach.co.uk. For more information about AlixPartners and its global financial advisory services, contact managing director Paul Hemming at phemming@alixpartners.com.
