Consumers prompt growth in Thai cuisine, Chinese and Spanish lose favour

Data from Market Growth Monitor research by CGA and AlixPartners reveals fast-changing appetites for Britain’s managed restaurants.
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Britain’s high streets have seen numbers of Thai, American, Mexican and Japanese managed restaurants soar over the past five years, while Chinese and Spanish restaurants appear to be on the decline.

According to research for the ongoing Market Growth Monitor from CGA and AlixPartners, the quarterly review of licensed premises in Britain, Thai managed restaurants have more than doubled in the five years to December 2018—leaping 123% from 66 to 147 following the rise of brands such as Giggling Squid and Rosa’s, as well as smaller operators.

The data—tracking outlets that are part of a pub or restaurant chain rather than independents—reveals that numbers of American themed restaurants jumped by 73% from 535 in December 2013 to 925 in December 2018, with barbecue-style and burger concepts among the biggest drivers. Interestingly, CGA data sees that the consumer focus on health-conscious foods means outlets have seen a decline of -1.4% within the last year.

Mexican restaurants meanwhile rose by 49% to 370 outlets, thanks to the expansion of popular concepts such as Wahaca, Barburrito and Tortilla. The number of Japanese sites climbed nearly as fast at 44% to 305, driven by sushi specialists such as YO! Sushi.

The trends are reinforced by data from CGA’s BrandTrack survey of consumers, which shows how interest in Thai, Mexican and Japanese food all increased between 2017 and 2018.

Market Growth Monitor figures also reveal steep rises in the number of Caribbean, Greek and Middle Eastern managed restaurants, though these were from much lower bases. At the other end of the scale, CGA’s data shows a 44% five-year drop in the number of Chinese managed restaurant numbers to just 61, and a 26% dip in those specializing in Spanish food to 64.

CGA’s business unit director for food and retail Karl Chessell said: “This is an example of the fast-changing tastes of British diners. As consumers broaden their horizons with travel they are discovering many new cuisines and are bringing their appetite for fresh flavours back home. This trend is particularly obvious in the Asian sector, where food knowledge has gone way beyond Chinese, and interest in Thai, Japanese and a repertoire of other cuisines is soaring. The healthy aspects of these foods may well be another factor in their popularity.”

He added: “The rise of managed Mexican restaurants shows the appeal of bold, spicy flavours. Many Mexican brands have also benefited from factors of convenience and location, which CGA data consistently show to be big drivers of restaurant choice. Our new Business Leaders’ Survey tips premium fast food, flexible formats and street food style operators as likely to thrive in 2019—and Mexican food plays very well to all three segments. Spanish food, meanwhile, has probably been another victim of the huge diversification of food tastes, though of course, some Spanish brands continue to thrive.”

AlixPartners managing director Graeme Smith said: “The Asian-led part of the restaurant market is of particular interest to investors given its current popularity among consumers and is ripe for further M&A activity. There is more careful focus on what sets a brand apart from its peers and a clamour to acquire the best-in-class brand in each vertical and cuisine.

“We would expect to see Private Equity be increasingly active in the segment of the market, following the consumer-led demand. Trade buyers may well compete here to add Asian brands to their stable in the wake of the acquisition of Wagamama by TRG. For the more established segments, we would also expect more and more brands to be turning their attention overseas to increase their expansion options.”

Market Growth Monitor data shows that Italian remains by far the most common type of cuisine in managed restaurants, with numbers rising 12% to 1,923 in the five years to December 2018. But the figure has been trimmed by 4% in the last year, as several Italian brands, including Jamie’s Italian and Prezzo, have closed a large number of outlets as high streets reach saturation point.

Across the board, the Market Growth Monitor reveals the number of managed restaurants is now in decline for the first time in 14 years.

Note: Figures relate to managed restaurants that are part of a wider restaurant or pub groups, as opposed to independently run sites.

The quarterly Market Growth Monitor from CGA and AlixPartners provides a host of insights into restaurant, pub, and bar openings and closures across Britain. All data from the Monitor is drawn from CGA’s Outlet Index, a comprehensive and continually updated database of all licensed premises in Britain.

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