Reduced consumer spending has eaten away at industry revenue
London, United Kingdom (PRWEB) May 23, 2013
The Full-Service Restaurants industry has endured a difficult time during the past five years. According to IBISWorld industry analyst Steven Connell, “the economic downturn caused many consumers to cut back on discretionary spending such as dining out, whilst others traded down to cheaper takeaway options or chose to cook at home instead”. Changes to government regulation and policies concerning wage costs, alcohol tax and food safety have prevented growth. Industry profitability is estimated to fallen because of declining patronage, falling prices, and rising labour and food costs. Several struggling operators have been forced to exit the industry but some have found opportunities to expand their operations. In tough economic conditions and in response to cautious consumer spending, most operators have focused on providing quality food at affordable prices and providing excellent customer service to give consumers the best value for money. Operators with strong brands have performed well. Revenue is estimated to decline at a compound annual rate of 3.4% over the five years through 2013-14 and reach £19.2 billion. Revenue is forecast to rise by a meagre 0.5% in the current year.
The industry should perform better over the next five years but will be constrained by sluggish economic conditions. Austerity measures, high unemployment and lingering global economic uncertainty will restrict growth and thus also discretionary spending on activities like dining out. Connell adds, “conditions should improve from 2015-16 as a recovering consumer environment makes diners less value-conscious and encourages them to spend more on quality and provenance”. Restaurants that tap into prevailing social and environmental trends, and continue to emphasise high-quality, locally sourced produce should perform best. Mobile and online technology will also influence the industry as people use smartphone apps to choose restaurants and make reservations. Industry revenue is forecast to return to modest growth over the next five years through 2018-19.
The Full-Service Restaurants industry encompasses a large number of single-establishment, owner-operated restaurants. This means it is highly fragmented and owners typically compete on price, menu offerings and cuisine. The top four players will account for less than 10% of industry revenue in 2013-14. This equates to a low level of market share concentration. Major companies include Gondola Group, Whitbread, The Restaurant Group and Tragus Group.
For more information on the Full-Service Restaurants industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry comprises sit-down restaurants where a waiter takes orders at the table. Restaurants in this industry are licensed to sell alcoholic beverages for consumption on their premises.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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