You are on page 1of 19

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

Euromonitor International October 2011

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

LIST OF CONTENTS AND TABLES


Executive Summary ..................................................................................................................... 1 Diminished Discretionary Spending Impacts Foodservice Sales .............................................. 1 Some Silver Linings .................................................................................................................. 1 A Tough Time for Pub Operators .............................................................................................. 1 Chained and Independent Operators Bear the Brunt................................................................ 1 Outlet Closures Are Expected To Weaken Sales ..................................................................... 2 Key Trends and Developments .................................................................................................... 2 Economic Instability Limits Consumer Foodservice Growth ..................................................... 2 Bars/pubs Impacted Most by Changing Consumer Behaviour ................................................. 3 Calorie Labelling on Menus ...................................................................................................... 4 Convenience Is Still A Key Driver of Foodservice Sales ........................................................... 6 Foodservice Operators Embrace Social Media Marketing ........................................................ 7 Market Data .................................................................................................................................. 8 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Units, Transactions and Value Sales in Consumer Foodservice: 20052010 ............................................................................................................. 8 Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2005-2010 ....................................................................................... 8 Consumer Foodservice by Independent Vs Chained Outlets: Units/Outlets 2010........................................................................................ 9 Consumer Foodservice by Eat in Vs Takeaway 2010 .................................. 9 Consumer Foodservice by Food Vs Drinks Split 2010 ................................. 9 Sales in Consumer Foodservice by Location 2005-2010 ............................. 9 Leading Chained Consumer Foodservice Brands by Number of Units 2010 ........................................................................................................... 10 Chained Consumer Foodservice Company Shares 2006-2010 ................. 11 Chained Consumer Foodservice Brand Shares 2007-2010 ....................... 12 Forecast Units, Transactions and Value Sales in Consumer Foodservice: 2010-2015 ............................................................................ 13 Forecast Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2010-2015 ............................................................ 13

Appendix .................................................................................................................................... 14 National Consumer Expenditure ............................................................................................. 14 Table 12 Table 13 Consumer Expenditure on Consumer Foodservice 2005-2010 .................. 14 Number of Outlets 2004-2009 .................................................................... 14

Operating Environment............................................................................................................... 15 Definitions................................................................................................................................... 15 Summary 1 Research Sources ...................................................................................... 15

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

CONSUMER FOODSERVICE IN THE UNITED KINGDOM


EXECUTIVE SUMMARY Diminished Discretionary Spending Impacts Foodservice Sales
The consumer foodservice industry in the UK continues to be affected by economic volatility. 2010 was a better year than 2009 in terms of real GDP growth and the country came out of recession. However, the after effects of the recession are being felt by consumers. Unemployment in the UK is impacting the active population, which, combined with inflationary food prices and frozen salaries, is reducing discretionary spending. People are more cautious about spending, with value a key factor in purchasing decisions. Although eating out is a way of life for many consumers, the number of times people eat out and the type of foodservice they choose is dictated by their concern about saving or reducing debt.

Some Silver Linings


Certain takeaway and fast food types have fared better than other types of consumer foodservice. Such operators offer what the busy customer wants, in particular, convenience at lower prices. Fast food operators have been able to capture the lunchtime crowd while takeaway outlets have increased customer uptake at dinner times. In addition, these players are investing in and using technology to make it easier for customers to order takeaways online. Other big operators are pushing their local and natural credentials, such as the use of British beef and free range eggs.

A Tough Time for Pub Operators


Bars/pubs is the consumer foodservice type facing the toughest time in the UK, mainly due to the recession. These outlets face changes in consumer habits, which include more time entertaining at home and less time drinking out. This has been further exasperated by adverse media publicity, which has resulted in more of the public viewing bars/pubs as responsible for a binge drinking culture in the UK. With restrictions on discretionary spending, pub operators are looking for new ways to save their loss making businesses. Some are reducing the size of their estate, while others are introducing more food to reduce the dependency on drinks sales. Some pub operators have also been changing their formats, transforming underperforming brands by focusing on family dining and ambience.

Chained and Independent Operators Bear the Brunt


Both chained and independent operators have been hit by the slow performance of the industry. The factors common to chained and independent players are reduced footfall, increased commodity prices, higher rents and, in some cases, legislation. Chained operators, however, have the capability to offer more price promotions to retain customers and the financial resources to adapt their product offering to meet changing consumer requirements. Chained players are also in a better position to leverage marketing through social media to connect with customers. They are also in a position to invest in staff training, implement new technology or improve supply chain efficiencies to obtain cash savings.

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

Outlet Closures Are Expected To Weaken Sales


On-trade constant value sales and the number of consumer foodservice outlets are expected to fall over the forecast period, despite the weakening effects of the recession. However, smaller, niche or less developed foodservice types and more affordable options such as chained Asian fast food and chained 100% home delivery/takeaway, as well as chained specialist coffee shops.

KEY TRENDS AND DEVELOPMENTS Economic Instability Limits Consumer Foodservice Growth
The UKs economy grew by 1.4% in 2010. This is an improvement on the 5% decline registered in 2009; however, the recovery from recession has been slow. The unemployment rate in the UK increased to reach 7.8% in 2010. The slow recovery of the economy weakened unemployment rates. During the fourth quarter of 2010 the economy shrunk by 0.6%, as reported by the Office of National Statistics. The negative growth was in part due to the heavy snow towards the end of 2010 which led to flights being cancelled on a large scale and retail sales being affected, especially over Christmas. Inflation was also high at 3%. Current Impact In 2010, consumer foodservice was strongly affected by the economic situation in the country. Although an improvement on 2009, economic difficulties led to a 2% decline in the overall number of outlets in 2010, falling to 172,000. Many players were faced with decreased footfall in their establishments. Consumers also started looking for cheaper alternatives and supermarkets in the UK started to focus on marketing and selling products to consumers wanting to dine or entertain at home more. The heavy snowfall at the end of 2010 also encouraged more people to stay in rather than eat out. Foodservice operators were also impacted by rising rents and taxes, such as excise duty on alcoholic drinks. The majority of the foodservice players had to increase their prices, which led to a 1% increase in current value sales in 2010, compared to a 1% decline in 2009. This increase was due to price inflation rather than customer traffic. Economic instability also resulted in a level of polarisation, with consumers looking for more value by trading down from dining in full-service restaurants to takeaway or fast food options. This provided opportunities for growth for these foodservice types, at the expense of full-service restaurants. Price inflation in the UK reached peaked in 2010, however public pay rises were frozen or minimal, thereby affecting take home salaries for many consumers. This reduced discretionary spending, which negatively affected many foodservice operators. More costly forms of dining out, such as business lunches, were reduced due to constraints on corporate budgets. Outlook In 2011, GDP is expected to grow by 1.5%, based on Q1 and Q2 economic performance statistics. After the decline in GDP growth in Q4 of 2010, Q1 2011 witnessed an increase of one half of a percentage point. However, growth slowed down to 0.2% in Q2 2011. The main reasons for the slowdown in GDP growth were the long weekend due to the royal wedding, the April bank holiday and the effects of the Japanese Tsunami. Following the Q2 2011 performance, the 2011 GDP growth forecast was revised downwards, from 1.9% to 1.3%. This indicates that the economy is returning to pre-recession levels at a slow pace.

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

Meanwhile, food price inflation continues to increase. In May 2011, the UK had the highest food price inflation of 4.9% in the Euro zone. It was also higher than in the US. According to Euromonitor International, food price inflation is expected to reach 4.1% by the end of 2011. The decline in unemployment has been slow, but it is expected to fall to 7.7% in 2011. A possible silver lining in the forecast period for the economy is offered by Londons hosting of the Olympics and Paralympics in 2012. Events will also take place outside of London. Future Impact Over the forecast period, consumer foodservice in the UK is expected to post CAGR declines in terms of outlet numbers and constant value sales. However, the projected declines represent an improvement on the review period performance. Alongside the slow recovery of the economy, the continuing decline will owe much to the ongoing maturity of some foodservice types in the UK. The slow economic recovery also means that consumers will be more cautious on how they use their discretionary spending. It is still unclear what effect the 2012 Olympics and Paralympics will have on international tourist numbers. Some observers believe that these events will boost domestic rather than international tourist numbers. Irrespective of the type of tourist, the increase in the number of people in and around London is expected to boost some sectors of the economy. All tourists, be they domestic or international, will boost the demand for food and drink, which provides growth opportunities to foodservice operators during the London Olympics in 2012.

Bars/pubs Impacted Most by Changing Consumer Behaviour


The aftermath of the recession has negatively affected the frequency with which people drink in foodservice outlets. With many supermarkets offering alcoholic drinks at discounted prices, bars and pubs are unable to match their cheap offers. Consumers have also been entertaining more at home, rather than going out. In some cases, there are examples of so-called preloading: consumers start drinking at home and go to bars or pubs later in the evening to minimise the amount of drink and money they spend in foodservice establishments. Apart from changes in social drinking habits, bars and pubs have been affected by changes in legislation. The government has stated its intention to curb the binge drinking culture in the UK. Although little has been done in terms of setting minimum prices for alcoholic drinks in supermarkets, the government is strengthening legislation relating to bars/pubs. Through police reform and the social responsibility bill introduced in late 2010, councils have the power to charge a late night levy on venues. Moreover, anyone can object to a licence being granted to a bar or pub, irrespective of location. Additional changes include increased fines for selling to underage drinkers. Bars/pubs has also been impacted by increased rents and overheads. Current Impact In 2010, the number of bars/pubs in the UK declined by 5% while on-trade current value sales declined by 6%. Bars/pubs could not compete with the cheap prices offered by supermarkets. These foodservice outlets are finding it difficult to sustain consumer footfall and the length of time that consumers spend in their premises. They are also marred by the perception that they encourage binge drinking in young people. Many bar/pub operators are slowly trying to move away from a drinking culture to tap into the eating out trend. They are also trying to get rid of brands/outlets with high drink over food revenues. For example, in 2010, Mitchells & Butlers Plc, the second-ranked player within chained bars/pubs in on-trade value sales terms, announced plans to reduce the number of pubs in its portfolio. It sold 333 outlets to Stonegate Pub Co Ltd. Sales focused on "non-core" pubs and outlets with a high proportion of drinks revenue. The 333 pubs consisted of 52 scream

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

pubs, 71 bars & venues, 75 town pubs, 67 community pubs and 68 other small pubs. The company also announced the acquisition 22 leasehold sites of Ha Ha Bar & Grill from Bay Restaurant Group. Outlook Over the forecast period, bars/pubs is expected to be further impacted by changes in consumer behaviour as people become more accustomed to drinking at home. The recession has made people quite thrifty and as food prices increase, the amount of discretionary spending is more limited. Moreover, concerns about a potential double-dip recession are encouraging consumers to spend their money on more essential items. Operators will have to try and push the value on offer to customers in their bars or pubs. Economic instability is continuing in the post-recession period, and the economy has still to recover fully. The industry also expects excise duty on alcoholic drinks to increase over the review period, which will make it difficult for on-trade establishments to offer competitive pricing. Overall, bars/pubs is not predicted to perform strongly over the forecast period as the abovementioned factors continue to hinder hamper growth opportunities. Future Impact Pubs are a part of Britains culture and are one of the locations where people choose to socialise and this will continue to be the case. Over the forecast period, bars/pubs is expected to decline by a 2% CAGR in terms of number of outlets and by a 4% constant value sales CAGR. Operators of bars/pubs intend to reduce the size of their estate to cope with the difficult economic situation. Operators will need to innovative to find ways to improve their margins such as improve the proportion of food to drink sales, thereby reducing the dependency of their business on drinks sales. Among the companies to have announced such plans are Punch Tavern Group Ltd and Barracuda Group Plc. In early 2011, Punch Tavern Group once again announced plans to de-merge its spirits business and run two separate businesses - the spirits division and Punchs tenanted and leased business. The company also plans to reduce the number of pub outlets to 3,000, from around 6,000. It believes that the remaining 3,000 outlets are of strategic importance and that they will continue to function well irrespective of the economic climate. While Barracuda Group is rebranding its Varsity night clubs as Smith & Jones pubs. The company is reducing its dependency on late night outlets and moving to provide a more relaxed family dinner environment in its Smith & Jones pubs. Towards the end of 2010, Barracuda also announced plans to roll-out Costa coffee in all of its managed estate so as to attract the breakfast crowd as well as women.

Calorie Labelling on Menus


Calorie information was not available widely across all foodservices types at the end of the review period. In 2009, the Foods Standard Agency (FSA) in the UK announced its intention to introduce a voluntary calorie labelling scheme for the catering industry. In April 2009, the FSA announced the names of 18 catering companies that had agreed to take part in the pilot calorie labelling scheme. Of the enterprises listed by the FSA, the ones relevant to Euromonitor Internationals consumer foodservice research were - Burger King, Camden Food Co, Compass Group Plc, Harvester and Scream (operated by Mitchells & Butlers), KFC, Marks & Spencers Caf Revive, Pizza Hut, Pret a Manger, Sainsburys Caf, Subway, Co-operative Cafs, The Real Greek, Waitrose Caf and Wimpy. Many players also provide such information on their websites, which sometimes cannot be access by customers when they are ordering food.

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

Through such efforts, the FSA is trying to provide consumers with information on calories so that they can make an informed decision about their diets, thereby helping to reduce the high obesity rates in the UK. Current Impact Food labelling has been implemented as a mandatory law in some cities in the US. In the UK, where calorie labelling is voluntary, there has been a mixed reaction from operators and customers alike. In mid-2010, it was discovered that many of the foodservice operators participating in the FSA pilot scheme had stopped displaying calorie information. According to the FSA, players such as Burger King and KFC have not shown any interest in extending the practice beyond the pilot period, while others, such as Pizza Hut and Mitchells & Butlers have already stopped displaying calorie information. Of the 18 companies that trialled the calorie labelling, only five operators have agreed to give a long-term commitment to calorie labelling: Pret a Manger, Co-operative Cafs, Camden Food Co and The Real Greek. Restaurants like The Real Greek, which continues to implement the voluntary calorie counting scheme, have reported an increase in people choosing lower calorie options. Unless fast food chains like KFC and Burger King are committed to such practices, the issue of obesity in the UK will not be addressed fully. These players hold strong competitive positions and their adoption of and commitment to such FSA schemes might encourage other consumer foodservice operators to participate. Outlook The FSA has confirmed that it does not plan to make the scheme mandatory in the UK. It believes that operators should try to identify consumer needs and that consumer demand will drive this trend rather than FSA regulation. Consumers are expected to be divided on the issue of calorie information when ordering in foodservice outlets. A growing section of the population is demanding healthier options, and these consumers have identified the health and weight issues they need to work on in order to lead a healthy life. Lifestyle changes and growing demand from consumers could force more foodservice operators to take-up the voluntary calorie counting practice. On the other hand, many consumers will continue to eat what they like and to look for value for money meals. For these consumers, calories are expected to be a secondary consideration, irrespective of the displaying of calorie information. Future Impact Foodservice operators will make gains through the calorie labelling initiative. This practice will improve their image among consumers. They can also charge higher prices while promoting their healthier eating credentials. They could tailor their menus to offer consumers the opportunity to control their calorie intake. The calorie labelling initiative is expected to add costs for operators, but given the expected high incidence of obesity in the UK, it will be better for businesses to act now and reap the benefits later. Some consumers could use calorie labelling as a way to obtain more calories per pound. They will have the option of choosing the food with the highest calorific value, thereby gaining more for their money. This would allow them to spend less, which will affect the profit margins of operators.

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

Convenience Is Still A Key Driver of Foodservice Sales


Consumers around the world, including in the UK, are leading increasingly hectic lifestyles. Busy work and home commitments reduce the time people have to spend with the family during the week. They prefer to spend quality time with the family rather than too much time cooking in the kitchen. Moreover, the recession has increased the time people spend at work as they try to protect their jobs. Increasingly hectic lifestyles have forced more consumers to rely on foodservice operators to provide various meals. For people who do not wish to or are unable to cook extensively at home, convenience is the most important factor, after financial considerations. Current Impact Various fast food and takeaway operators performed well in the UK in 2010.Overall, consumer foodservice recorded a 2% decline in outlet numbers and a 1% increase in current value sales. However, pizza 100% home delivery/takeaway (HDTA) grew by 2% in outlet terms and by 10% in current value sales terms. Other foodservice types that continued to offer convenience and food on the go also performed well. For example, chicken fast food and burger fast food, which registered current value sales growth of 6% and 2%, respectively, in 2010. Websites such as Just Eat (www.just-eat.co.uk) offer consumers the option to search for fast food takeaway outlets close to their postcode. They can order online and the food is delivered to their home. The website is popular because it allows consumers to choose from different cuisines in their locality. According to the companys website, it has more than 1.5 million registered members. In addition to registering with Just Eat, foodservice operators are working on making their own websites more accessible to customers. They are also introducing iPhone and other smart phone apps to keep on top of the competition. Consumers are realising that they can spend less money when they trade down to fast food or takeaway options, compared to eating in full-service restaurants or bars/pubs. Outlook Consumers will continue to look for more convenient ways to consume daily meals. Fast food operators also need to fend-off the competition from supermarkets, which offer deals such as Dine in for 10.00. The economy in the UK is not expected to perform strongly in the short term, and this outlook is having an impact on consumer behaviour. Consumers are unlikely to revert to pre-recession dining behaviour in the short term. They will continue to look for added value from foodservice operators, especially convenience. Future Impact Convenience will play a key role in consumers choosing to eat takeaway food in the forecast period. Over the forecast period, constant value sales of pizza 100% HDTA are expected to grow by a 3% CAGR, while chicken fast food is predicted to record a 1% constant value CAGR. Consumers will also continue to entertain at home. One of the easiest and cheapest ways to entertain at home is to order a takeaway meal. Players invest significantly in direct marketing, posting high volumes of vouchers offering money saving meal deals to the homes of potential customers. The offer of such deals ensures that consumers will continue to order takeaway options in the forecast period. Fast food operators will also benefit from targeting the lunch time crowd. These consumers are usually busy working professionals and they require food fast and on the go.

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

Foodservice Operators Embrace Social Media Marketing


The use of social media is increasing rapidly in the UK. The advance of technology allows the purchase of smart phones, iPads or other tablets at more affordable prices. Technology is penetrating consumer lifestyles in the UK at a dynamic rate. Not only are consumers becoming more internet savvy, they are also spending lot of time surfing the internet trying to find the best deals or the best reviews and to share their opinions and feedback with friends and family, but also strangers. In March 2011, Facebook Europe announced that the number of users in the UK had reached 30 million. This represents an increase of four million users from July 2009. The company also revealed that many people have the constant urge to check their Facebook profiles, be it early in the morning or late at night. According to latest statistics from Twitter, around 600 per sec are sent by its users on a global level. This indicates that more consumes are awake 24/7, therefore businesses have the opportunity to engage with consumers at any time of the day. Current Impact Many foodservice operators have identified the increase in social media usage by consumers and they have started targeting this potential audience. Apart from social networks such as Facebook and Twitter, operators are keen on using blogs, podcasts and similar tools to improve their competitive positioning. TGI Fridays launched a Facebook page in July 2010. The player considers the most active users of its Facebook page as ultimate fans and it provides them with added-value offers, such as vouchers to try out new menus, and they are given invitations to special events. TGI Fridays popular Cocktail Genius app allows fans to match cocktails with the personality traits of their friends. Yo! Sushi has also targeted the social media crowd through marketing. In January 2011, the player gave away 2,000 meals, each with a value of 60,000, to the first 1,000 diners to checkin to Facebook Places and state which Yo! Sushi outlet they were in with a friend. Yo! Sushi aims to target technology and social media savvy customers through such promotions. Starbucks launched a similar promotion, offering free coffee to 30,000 Facebook users. According to the Internet Advertising Bureau, Social networks/blogs account for around 25% of the time spent online in the UK. This is reflected in the efforts that operators are putting into building an online presence for their brands. The majority of foodservice operators in the UK have a Twitter or Facebook account and they post of the latest news and price promotions to consumers e-mail addresses. Outlook Over the forecast period, social media and networking websites will strengthen their hold on the publics attention. The growth in technology will provide better smart phones and other devices that improve web connectivity and access. Manufacturers of consumer electronics will compete fiercely which will benefit consumers in terms of pricing and product performance. Meanwhile, Facebook aims to increase the number of users to one billion, from 500 million, over the forecast period. Almost all manufacturers will have Facebook or Twitter accounts in order to improve their access to and interaction with consumers. This will lead to two-way communication between brands and consumers. When foodservice operators are ready and able to listen to what consumers want, they will benefit significantly from such practices. Engaging customers will become an important aspect of business and features such as downloading menus or locating outlets will be considered quite basic services.

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

Consumers are also likely to share experiences online on a regular basis, sharing news of events and services and feedback with their friends. Online reviews will become important for brands, increasing the importance and impact of word-of-mouth advertising. On the down side, the longevity of any social networking site is uncertain. MySpace, the premier social networking site prior to the rise of Facebook, was recently sold for a fraction of its former value. Facebook may be threatened by Google+, a new social networking site from the internet giant Google. The lifecycle of any social networking application or service appears to be getting shorter all the time, and committing too strongly to a single social network may prove limiting very quickly. Future Impact Regardless of the future success of specific social media sites, these platforms will play a key role in how people interact with consumer foodservice brands. Since dining out is a social event, any service that allows customers to share their experiences will be successful. The more customers identify with different brands, the more likely they will be to recommend them to friends and family and the online community. Foodservice operators need to ensure that every customer has a positive experience in their outlets. The power of social media is such that a negative experience can go a long way towards damaging the reputation of a brand. Operators should therefore develop strong social media strategies. They should be able to fully utilise social media tools and not simply offer a Me Too Facebook page or Twitter account. Foodservice players should also provide tools to measure the effectiveness of their social media marketing initiatives.

MARKET DATA
Table 1 Units, Transactions and Value Sales in Consumer Foodservice: 2005-2010 2005 Units ('000) Transactions (mn) billion current prices billion constant prices
Source:

2006 185.0 5,859.5 53.3 52.1

2007 184.6 5,866.2 54.0 51.6

2008 180.4 5,849.1 54.1 49.8

2009 175.4 5,781.6 53.6 48.4

2010 171.9 5,725.9 54.0 47.2

183.3 5,771.2 51.9 51.9

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 2

Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2005-2010

% growth 2009/10 Units Transactions Value current prices Value constant prices
Source:

2005-10 CAGR -1.3 -0.2 0.8 -1.9

2005/10 TOTAL -6.3 -0.8 4.1 -9.0

-2.0 -1.0 0.7 -2.4

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

Table 3

Consumer Foodservice by Independent Vs Chained Outlets: Units/Outlets 2010

outlets Independent Cafs/Bars 100% Home Delivery/Takeaway Full-Service Restaurants Fast Food Street Stalls/Kiosks Pizza Consumer Foodservice Self-Service Cafeterias Consumer Foodservice
Source:

Chained 32,018 1,137 3,447 8,739 363 2,771 2,678 48,382

Total 64,641 19,347 32,307 37,168 15,639 4,243 2,769 171,871

32,623 18,210 28,860 28,429 15,276 1,472 91 123,489

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 4 % value analysis

Consumer Foodservice by Eat in Vs Takeaway 2010

Eat in 100% Home Delivery/Takeaway Cafs/Bars Full-Service Restaurants Fast Food Street Stalls/Kiosks Self-Service Cafeterias Consumer Foodservice
Source:

Takeaway 100.0 7.6 24.8 78.7 100.0 1.1 45.5

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0

92.4 75.2 21.3 98.9 54.5

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 5 % value analysis

Consumer Foodservice by Food Vs Drinks Split 2010

Food 100% Home Delivery/Takeaway Cafs/Bars Full-Service Restaurants Fast Food Street Stalls/Kiosks Self-Service Cafeterias Consumer Foodservice
Source:

Drink 11.0 50.4 23.6 34.6 18.7 36.6 32.4

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0

89.0 49.6 76.4 65.4 81.3 63.4 67.6

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 6 % value

Sales in Consumer Foodservice by Location 2005-2010

2005 Leisure Lodging Retail 1.9 7.6 3.4

2006 2.1 7.5 3.8

2007 2.2 7.7 3.9

2008 2.3 7.7 4.2

2009 2.3 7.8 4.4

2010 2.4 7.9 4.5

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

10

Travel Stand-Alone Total


Source:

3.1 84.1 100.0

3.1 83.5 100.0

3.3 83.0 100.0

3.3 82.5 100.0

3.4 82.2 100.0

3.5 81.8 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 7

Leading Chained Consumer Foodservice Brands by Number of Units 2010

Brand Enterprise Inns Punch Taverns Marston's Admiral Taverns Greggs Subway Scottish & Newcastle Costa Coffee JD Wetherspoon McDonald's Starbucks

Global Brand Owner Enterprise Inns Plc Punch Tavern Group Ltd Marston's Pub Co Admiral Taverns Ltd Greggs Plc Various franchisees Scottish & Newcastle Plc Whitbread Plc JD Wetherspoon Plc Various franchisees Starbucks Coffee Holdings (UK) Limited Tesco Plc Pizza Hut UK Ltd/Whitbread Plc Domino's Pizza Group Ltd Various franchisees Various franchisees McDonald's Restaurants Ltd Caff Nero Group Plc Wm Morrison Supermarkets Plc Gondola Holdings Plc Fuller, Smith & Turner Plc J Sainsbury Plc British Petroleum Co Plc, The Greene King Plc Asda Group Ltd Kentucky Fried Chicken (Great Britain) Ltd Marks & Spencer

outlets 6,800.0 5,967.0 2,150.0 1,700.0 1,487.0 1,420.0 1,400.0 1,195.0 770.0 717.0 701.0

Tesco Pizza Hut Domino's Pizza KFC Burger King McDonald's Caff Nero Morrisons PizzaExpress Fuller's J's BP Connect

655.0 632.0 616.0 522.0 512.0 477.0 423.0 390.0 380.0 359.0 355.0 354.0

Belhaven Asda KFC

345.0 325.0 312.0

Marks & Spencer

285.0

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

11

Wild Bean Caf

Southern Fried Chicken (SFC) Hall & Woodhouse pubs Others Total
Source:

Plc British Petroleum Co Plc, The Various franchisees Hall & Woodhouse Ltd Others Total

250.0

247.0 238.0 16,398.0 48,382.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 8 % value Company

Chained Consumer Foodservice Company Shares 2006-2010

2006 9.4 8.8 6.4 5.0 7.2 5.6 3.0 3.6 3.9 2.0 2.1 1.3 1.6 1.6 0.9 1.2 1.7 0.6 0.6 0.7 0.8 0.6 0.8 0.8 1.1 0.6 0.3 0.5 0.6 0.7 0.3 0.3

2007 9.6 9.3 6.7 5.2 7.6 4.9 2.6 3.1 3.5 3.1 3.3 2.1 1.5 1.7 1.8 1.0 1.3 2.3 0.6 0.9 0.8 0.9 0.7 0.8 0.8 0.9 1.0 0.6 0.3 0.5 0.6 0.7 0.4 0.3

2008 10.6 9.1 6.7 5.2 6.2 4.9 2.9 3.4 3.0 3.1 3.1 2.3 1.8 2.1 1.8 1.2 1.4 2.0 0.8 0.9 0.8 0.9 0.8 0.8 0.8 0.9 0.9 1.4 0.6 0.4 0.5 0.6 0.6 0.4 0.4

2009 11.6 9.7 7.2 5.5 5.3 3.8 3.3 3.5 3.1 3.0 3.0 2.4 2.1 2.3 1.9 1.3 1.4 1.7 0.9 0.9 0.8 0.9 0.8 0.8 0.8 0.9 0.9 1.2 0.7 0.5 0.6 0.6 0.6 0.4 0.4

2010 12.0 8.6 7.7 5.8 4.4 4.2 3.7 3.6 3.1 2.9 2.9 2.6 2.5 2.2 1.9 1.4 1.4 1.4 1.0 0.9 0.9 0.9 0.9 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.6 0.6 0.6 0.4 0.4

McDonald's Corp Mitchells & Butlers Plc Yum! Brands Inc JD Wetherspoon Plc Punch Tavern Group Ltd Enterprise Inns Plc Whitbread Plc Greggs Plc Burger King Holdings Inc Greene King Plc Marston's PLC Gondola Holdings Plc Domino's Pizza Inc Doctor's Associates Inc Starbucks Corp Pret a Manger Europe Ltd Tesco Plc Admiral Taverns Ltd Nando's Group Holdings Ltd Tragus Holdings Ltd J Sainsbury Plc British Petroleum Co Plc, The Caff Nero Group Plc Wm Morrison Supermarkets Plc Restaurant Group Plc, The InterContinental Hotels Group Plc Little Chef Ltd Heineken NV Wal-Mart Stores Inc EAT Marks & Spencer Plc Fuller, Smith & Turner Plc Southern Fried Chicken Ltd Prezzo Plc Carluccio's Plc

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

12

Hall & Woodhouse Ltd SSP Group Ltd Arcadia Group Ltd Town & City Pub Co Ltd Wagamama Ltd Lyndale Foods Ltd Clapham House Group Plc, The Famous Brands Ltd Barracuda Group Plc Debenhams Retail Plc Papa John's International Inc D&D London Ltd Unilever Group Selfridges Plc Pizza Go Go Ltd Others Total
Source:

0.5 0.6 0.2 0.5 0.2 0.2 0.2 0.1 0.1 0.1 0.1 22.7 100.0

0.5 0.6 0.2 0.5 0.3 0.4 0.3 0.2 0.1 0.3 0.2 0.2 0.1 15.0 100.0

0.5 0.5 0.3 0.2 0.3 0.3 0.3 0.4 0.3 0.3 0.2 0.2 0.2 0.2 0.2 12.6 100.0

0.4 0.5 0.3 0.2 0.3 0.3 0.3 0.4 0.3 0.3 0.2 0.2 0.2 0.2 0.2 10.8 100.0

0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 10.7 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 9 % value Brand McDonald's JD Wetherspoon McDonald's Enterprise Inns KFC Greggs Punch Taverns Burger King Costa Coffee Marston's Domino's Pizza Subway KFC Pizza Hut Starbucks PizzaExpress Pret a Manger Tesco Admiral Taverns Vintage Inns Harvester Nando's Crown Carveries J's Caff Nero Morrisons Toby Carvery Little Chef

Chained Consumer Foodservice Brand Shares 2007-2010

Global Brand Owner Various franchisees JD Wetherspoon Plc McDonald's Restaurants Ltd Enterprise Inns Plc Various franchisees Greggs Plc Punch Tavern Group Ltd Various franchisees Whitbread Plc Marston's Pub Co Domino's Pizza Group Ltd Various franchisees Kentucky Fried Chicken (Great Britain) Ltd Pizza Hut UK Ltd/ Whitbread Plc Starbucks Coffee Holdings (UK) Limited Gondola Holdings Plc Pret a Manger Europe Ltd Tesco Plc Admiral Taverns Ltd Mitchells & Butlers Plc Mitchells & Butlers Plc Nando's Group Holdings Ltd Mitchells & Butlers Plc J Sainsbury Plc Caff Nero Group Plc Wm Morrison Supermarkets Plc Mitchells & Butlers Plc Little Chef Ltd

2007 4.8 5.0 4.8 4.9 2.8 2.9 5.7 3.5 1.6 3.3 1.5 1.7 1.7 2.2 1.8 1.3 1.0 1.3 2.3 1.1 1.1 0.6 0.4 0.8 0.7 0.8 0.6 1.0

2008 5.9 5.0 4.6 4.9 2.9 3.2 4.9 3.0 2.0 3.0 1.8 2.1 1.8 2.1 1.8 1.5 1.2 1.4 2.0 1.2 1.2 0.8 0.7 0.8 0.8 0.8 0.7 0.9

2009 6.9 5.5 4.6 3.8 3.2 3.3 4.0 3.1 2.5 2.9 2.1 2.3 2.0 2.0 1.9 1.6 1.3 1.4 1.7 1.2 1.2 0.9 0.9 0.8 0.8 0.8 0.8 0.9

2010 7.1 5.8 4.8 4.2 3.6 3.6 3.1 3.1 2.9 2.8 2.5 2.2 2.1 1.9 1.9 1.6 1.4 1.4 1.4 1.3 1.2 1.0 1.0 0.9 0.9 0.8 0.8 0.8

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

13

Belhaven Scottish & Newcastle Asda Premium Country Dining EAT Chef & Brewer Marks & Spencer Fuller's Southern Fried Chicken (SFC) Frankie & Benny's BP Connect Ask Embers Inn Nicholsons Express by Holiday Inn Beefeater Carluccio's Hall & Woodhouse pubs Zizzi Prezzo Wild Bean Caf Holiday Inn Chef & Brewer Others Total
Source:

Greene King Plc Scottish & Newcastle Plc Asda Group Ltd Mitchells & Butlers Plc

0.7 1.0 0.6 0.4 0.3 0.5 0.6 0.7 0.4 0.5 0.4 0.6 0.5 0.5 0.3 0.5 0.3 0.3 0.4 0.4 0.6 28.5 100.0

0.7 1.4 0.6 0.5 0.4 0.5 0.6 0.6 0.5 0.5 0.4 0.6 0.2 0.5 0.5 0.4 0.5 0.4 0.4 0.4 0.4 0.6 25.8 100.0

0.8 1.2 0.7 0.6 0.5 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 23.6 100.0

0.7 0.7 0.7 0.7 0.7 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4 22.0 100.0

Punch Pub Company Ltd Marks & Spencer Plc Fuller, Smith & Turner Plc Various franchisees Restaurant Group Plc, The British Petroleum Co Plc, The Gondola Holdings Plc Mitchells & Butlers Plc Mitchells & Butlers Plc InterContinental Hotels Group Plc Whitbread Plc Carluccio's Plc Hall & Woodhouse Ltd Gondola Holdings Plc Prezzo Plc British Petroleum Co Plc, The InterContinental Hotels Group Plc Spirit Group Ltd

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 10

Forecast Units, Transactions and Value Sales in Consumer Foodservice: 2010-2015 2010 2011 169.6 5,693.1 53.0 2012 168.4 5,681.4 52.6 2013 168.3 5,681.5 52.3 2014 168.5 5,675.1 52.1 2015 168.8 5,683.7 52.0

Units ('000) Transactions (mn) billion


Source:

171.9 5,725.9 54.0

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 11

Forecast Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2010-2015

% growth 2010-15 CAGR Units Transactions Constant value


Source:

2010/15 TOTAL -1.8 -0.7 -3.7

-0.4 -0.1 -0.8

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

14

APPENDIX National Consumer Expenditure


Consumer expenditure on catering services includes expenditure on (meals, snacks, drinks and refreshments) provided by restaurants, cafs, buffets, bars, tearooms, etc. It also includes places providing recreational, cultural, sporting or entertainment services (theatres, cinemas, sports stadiums, swimming pools, sports complexes, museums, art galleries, nightclubs, dancing establishments, etc), public transport (coaches, trains, boats, aeroplanes, etc), when priced separately, and the sale of food and beverages for immediate consumption by kiosks, street vendors, etc. In addition, consumer expenditure includes: food products and beverages dispensed ready for consumption by automatic vending machines; the sale of cooked dishes by restaurants for consumption off the premises; the sale of cooked dishes by catering contractors, whether collected by the customer or delivered to the customers home; the catering services of canteens in the workplace, schools, universities and other educational establishments; and university refectories and military messes and wardrooms. The overall expenditure on catering might differ due to the wide range of definitions, mainly stemming from certain captive environments such as food served on public transport, vending machines and food served in sports facilities and entertainment services, which are also included in the consumer expenditure data. Table 12 million 2005 Consumer expenditure on catering
Source:

Consumer Expenditure on Consumer Foodservice 2005-2010

2006 76,072.0

2007 78,121.0

2008 78,798.0

2009 75,726.0

2010 77,103.0

74,642.0

Euromonitor International from National Statistical Office

Trade Association statistics The differences between Euromonitor International data and trade association statistics are derived from the differences in definition. Trade association statistics do not include all of the outlet types as defined by Euromonitor International. Table 13 Number of Outlets 2004-2009 2004 Hotels Ethnic restaurants European restaurants Other restaurants Restaurants Quick service Pubs Leisure Total 47,389 26,208 29,496 51,267 18,995 173,355 2005 47,009 26,416 29,645 51,046 19,121 173,237 2006 46,544 10,916 5,474 10,310 26,700 30,048 51,102 19,253 200,347 2007 46,188 10,915 5,478 10,534 26,927 30,455 50,841 19,370 200,708 2008 46,019 10,899 5,508 10,747 27,153 30,716 49,343 19,409 199,794 2009 45,869 10,894 5,524 11,085 27,502 31,042 46,153 19,486 197,555

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

15

Source:

Euromonitor International from British Hospitality Association

OPERATING ENVIRONMENT
Franchising The British Franchise Association (BFA) is a national voluntary self-regulating body for franchising; it is open to all franchisors, irrespective of the industry in which they operate. According to the association, 36% of franchisors in the UK are members of the BFA. Franchisors have the option of becoming full members, associate members or provisional listing companies. The BFA holds various seminars and conference throughout the year, to promote franchising. The main events are the National Franchise Exhibition and the BFA Franchisee of the Year Awards. According to the BFA, franchising in the UK grew by 5% in value terms in 2010 to reach 12.4 billion. The number of franchising units also grew in 2010, reaching 36,900. Franchising is one of the sectors that created an additional 56,000 jobs in the UK in 2010. The number of franchises is expected to grow in the medium term. There is little indication that the recession is having a severe impact on franchising. Indeed, franchised businesses appear to be in a much stronger position, as they have the additional protection of a proven business model and brand, and are considered a lower risk option by customers. It is also considered an easier method of starting a business, especially during tough economic times. The estimated start-up cost for a franchisee has declined, with new entrants paying an average of 46,600 in franchise fees and associated costs to the franchisor in 2010, compared to 50,400 in 2009. According to Euromonitor International, franchising is most apparent among fast food operators. Major players such as McDonalds, KFC, Burger King and Wimpy are more active in franchising. Franchising is also widely used as an option by foreign operators entering the country.

DEFINITIONS
This report analyses the market for Consumer Foodservice in the UK. For the purposes of the study, the market has been defined as follows: 100% home delivery/takeaway Cafs/bars Full-service restaurants Fast food Self-service cafeterias Street stalls/kiosks Sources used during research include the following: Summary 1 Research Sources Official Sources

Department of Business, Enterprise & Regulatory Reform National Statistics Office

Trade Associations

British Beer & Pub Association British Franchise Association

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

16

Coffee Trade Federation Federation of Fish Friars UK Petrol Retailers Association Seafish Industry Authority The British Sandwich Association The Fish Association The Pizza & Pasta Association The Tea Council Trade Press About Organics Ananova Aramark BBC News Bemrose Booth News Bized Brand Republic British Hospitality Association Trends & Statistics Magazine Business Europe Business Journal Cafe Culture Caterer & hotelkeeper Citywire Enterprise Wireless Technology Food Service Magazine Foodline Web Forecourt Trader Geest International Sandwich & Snack News Investor's Chronicle Licensee News Menu Magazine Metro magazine Morning Advertiser National Restaurant News Norestauration News & Market Overlook QSR Market Leader Restaurant

Euromonitor International

CONSUMER FOODSERVICE IN THE UNITED KINGDOM

PASSPORT

17

Retail Week Sandwich Magazine The Daily Teleraph The Grocer Magazine The Guardian The Independent The Observer The Publican The Scotsman The Soil Association The Sunday Times This Money UK Franchise Magazine, The www.bakeryinfo.co.uk
Source: Euromonitor International

Euromonitor International