Updated: Jan 14, 2019
Casual dining continues to grow in Britain with visits up nearly 7%, equivalent to an extra 35 million visits compared to the previous 12 months.
According to the latest figures by NPD Group, casual dining now accounts for 5% of visits in Britain’s eat-out or out-of-home (OOH) foodservice industry. While the overall OOH market suffered a decline of 43 million visits in the year to June 2018, casual dining chains grew visits by 34 million. Britons spent some £6 billion on casual dining, around 11% of total OOH spend. Over the same period, spending on casual dining restaurants grew four times faster than the total market.
Dominic Allport, insights director with The NPD Group, said: “Casual dining restaurants remain one of the key growth stories in Britain’s OOH foodservice market, despite the high-profile closures, rescues and restructuring seen in this sector in recent months. But while the market is expanding, success is not guaranteed. One of the problems has been the tendency for some operators to scale up too quickly, with ‘quantity of sites’ outweighing ‘quality of sites’. Some of the newer brands are also failing to set themselves apart from competitors, leaving consumers with the sense they are getting similar menus, similar venues and similar customer experiences. But the biggest issue is the pressure on profit margins with business rates, rent, food and labour all costing more in an over-supplied market.“
Operators are addressing margin pressures by seeking lower-cost sites, and there are signs that the push to expand casual dining is now less inclined to focus on London.
The casual dining sector is also using a variety of strategies to expand. Delivery continues to grow strongly across the casual dining market (up 9% YoY), order ahead/click and collect visits are also up (25% YoY), as are visits using meal deals or promotion (up 16% YoY).
Some casual dining restaurants are trying to expand beyond dinner into other opportunities such as breakfast and snacking as well as focusing on the family market, which saw visits grow by 11% for YE June 2018, almost three times faster than family visits across the overall OOH market.
Young adults/millennials are also loyal fans of casual dining restaurants. Visits from 16-24s are up 15% YoY, and 9% among 25-34s. Visits by both groups to casual dining restaurants are growing faster than with other OOH outlets such as quick-service restaurants.
NPD’s Dominic Allport added: “The continued growth of casual dining in Britain is good news for our foodservice industry. The ability of delivery platforms to reduce barriers to entry has particularly helped small brands to expand. Operators can support further growth by building strong consumer awareness, maximizing automation to reduce costs, maintaining prudent supply chain management, and driving off-peak visits through flexible pricing. But growth brings the risk of saturation and for that reason it is likely the casual dining boom will see further closures and rescues. Casual dining chains are most at risk from the ‘perfect storm’ of oversupply, lack of differentiation and sharp exposure to inflation, particularly labour costs. A chain that deals with this by cutting prices to boost visits will be the one that’s most at risk.”