The first half of 2019 has seen huge turbulence in the pub, bar and restaurant sectors. In a session at UKHospitality’s Summer Conference last week, CGA’s group chief executive Phil Tate cut through the noise to separate facts about trends and developments from fiction. Here are seven of his key messages.
1. Tables turning on food and drink
For many years now, restaurant brands have expanded at pace while the pubs and bars sector has endured a steady flow of closures. But that trend has changed abruptly. CGA’s Coffer Peach Business Tracker reveals like for like sales growth of 3.0% for managed pub groups in the 12 months to April—but just 0.1% for managed restaurants.
“We’re seeing Britons falling back in love with the pub, while restaurant sales remain static,” Tate said. Tate warned that last years’ blockbuster summer bolstered pub sales, meaning year-on-year sales comparisons may not paint as rosy of a picture this time around.
2. The growth of medium-sized restaurant brands
The balance of power in casual dining has shifted decisively in the last few years. CGA’s Outlet Index shows that big brands with 100+ restaurants have seen their site numbers fall by 7% in the last 12 months, while those with 25 to 99 locations—the likes of Wahaca, Five Guys and Franco Manca—have recorded an 8% increase. “The headlines in managed restaurants don’t tell the full tale and there are brands that are still cutting through with the consumers,” Tate said.
3. Fierce competition and more fickle consumers
Visits to the on-trade have held virtually level in the last 12 months, at an average of 0.8 visits per consumer per week. “People are not staying in and hiding under their beds in fear of Brexit,” Tate said. But what has changed for consumers is their loyalty to brands. CGA’s BrandTrack survey shows that consumers’ average number of food-led visits to particular brands has fallen from 3.0 to 2.7 in a year—a sure sign that people are becoming fickler and more experimental and taking advantage of the high-quality choices they have available.
4. A demand for experience
Consumers have left operators with little doubt that they want to do more than just food and drink out-of-home: they want an all-round experience. But experience isn’t just about new trends such as virtual reality, augmented reality or immersive reality. ‘Attainable’ experience is a focus on the fundamentals – executed precisely by a well-trained staff – day in, day out. This is what will keep customers coming back. Other people are looking for all-out experience that we see in places: Brigadiers, Otherworld and The Mind Palace in London, Yes in Manchester and Penny Lane in Nottingham are just five examples of immersive concepts that offer guests lots of things to do as well as eat and drink.
The importance of “social currency” —the ‘Instagrammable’ effect—is a big driver of this trend with 42% of consumers saying that documenting their night out is very important to them and 50% saying they experience FOMO looking at the social media feeds of their friends.
5. The rise of the third space
Street food markets, pop-ups, festivals and other third spaces are becoming ever more appealing to consumers. A third (35%) of the population has visited a third space activation in the last six months, BrandTrack shows—and since these people tend to be heavy on-trade users, they are a crucial market to attract and retain.
6. Sustainability and healthy eating in the mainstream
Concerns about things like food waste, plastic and healthy eating are no longer limited to some segments of the market: they have moved front and centre of consumers’ thinking. For example, BrandTrack shows that half (47%) of consumers now rate the sustainability of ingredients as important when choosing a meal out.
7. A thirst for new drinks
With consumers craving new experiences, they are demanding fresh and imaginative drinks—and suppliers are responding. CGA’s data shows that 352 new drinks products have launched into the on-trade so far in 2019—more than two a day. But not all of them will find traction. “People looking for new choices don’t have to go very far—but operators need to be careful on ranging, match the brand to the consumer in order to maximise sales,” Tate concluded.
Phil Tate’s UKHospitality Summer Conference session drew on CGA’s market-leading suite of research sources including BrandTrack, Outlet Index, On Premise Measurement Tool and Coffer Peach Business Tracker. These tools, overlaid with CGA’s exclusive consumer segmentation and location planning tools, can provide all operators and suppliers with the deep insights they need to meet consumers’ fast-rising expectations in the second half of 2019 and beyond. Email the team at hello@cga.co.uk to find out how we can help your business better understand this fast-changing industry.
