| KN52042 |
| KEY NOTE FAST FOOD AND HOME DELIVERY OUTLETS : April 2002 |
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This report covers: fast food, sandwiches, burgers, fish and chips, pizzas, chicken, ethnic foods,Chinese meals, Indian meals, coffee shops, soup bars
Companies covered include: Greggs, Prêt-à-Manger, DeliFrance, McDonald's Restaurants, Burger King, Wimpy restaurants Group, Pizza Hut, Perfect Pizza, Domino's Pizza, Deep Pan Pizza Company, Kentucky Fried Chicken, Southern Fried Chicken, Favourite Fried Chicken, Nando's Chickenland, Spud-U-Like, Harry Ramsden's, Select Service Partner, The Light Refreshment Company
EXECUTIVE SUMMARY
The UK fast food and home delivery outlets market was valued at £7.48bn in 2001, representing an increase of 3.2 percent at current prices on the previous year's value. The rate of growth in what has been a relatively buoyant market in the past 5 years slowed in 2001. Contributory factors were promotional activity bringing down prices, a slowdown in the pace of new store openings, new openings concentrating on smaller outlets, and a decline in overseas tourists later in the year affecting sales in London.
The largest sector is sandwiches, which contributed 35.8 percent of all market sales in 2001. Growth in the sector outperformed the market as a whole, with shorter lunches and an emphasis on light lunches and snacks boosting sales. In the second-largest sector — burgers (22.9 percent of all sales) — sales growth was weak as consumers switched from red meat and competition from other fast food sectors limited sales growth. The effects of rationalisation in the pizza sector (10.4 percent of all market sales) helped to improve sales growth here, but the sector achieving the strongest growth was chicken (6.2 percent of all sales). Chicken sales increased by 6.5 percent in 2001 as aggressive store openings, strong marketing support from the market leader, and menu innovations encouraged more demand. Other sectors are fish and chips (11.8 percent of all sales), where sales remain weak, and other fast food and home delivery outlets, such as coffee shops and those selling ethnic foods. Sales in the latter sector account for 13 percent of all market sales.
McDonald's and Kentucky Fried Chicken (KFC) dominate their respective market sectors with estimated market shares of 67 percent and 78 percent respectively. Other high-profile brands include Burger King, Pizza Hut, Domino's Pizza, and Perfect Pizza. Prêt à Manger and Greggs are leading brands in the sandwich sector but, like most other areas of the industry, this sector is still populated by many small, independent operators. The annual turnover for 82.6 percent of businesses is less than £250,000. Sectors such as fish and chips and ethnic foods continue to suffer from a lack of national and regional brands, and limited investment in outlets and menus.
While growth in the market has been lower in 2000 and 2001 than in previous years, the market is also very resilient. Certain sectors, such as sandwiches, are virtually recession-proof. Compared to other eating-out markets, fast food and takeaways remain a low-price alternative and the demand of busy consumers should maintain growth in the industry. In recent years, sales growth has been led by new store openings from the leading brands. However, the rate of store openings is falling and, in the next few years, more growth will have to come from increases in like-for-like sales.
Sales growth in 2002 and 2003 is expected to remain at the levels recorded in 2000 and 2001. Leading brand owners are likely to turn to long-term brand-building programmes at the expense of some promotional activity, as they attempt to generate real market growth and build stronger customer loyalty.
TABLE OF CONTENTS
| Executive Summary |
| 1. Market Definition |
| REPORT COVERAGE |
| MARKET SECTORS |
| Sandwiches |
| Burgers |
| Fish and Chips |
| Pizza |
| Chicken |
| Other Fast Food and Home Delivery Outlets |
| MARKET TRENDS |
| Increased Consumption |
| Outlet Expansion |
| Menu Diversification |
| Children |
| Franchising |
| Competition |
| MARKET POSITION |
| The UK |
| Table 1: The UK Catering and Fast Food and Home Delivery Market at Current Prices (£bn at rsp), 1997-2001 |
| Overseas |
| KEY TRADE ASSOCIATIONS |
| British Hospitality Association |
| The British Sandwich Association |
| The Pizza Pasta and Italian Food Association |
| The National Federation of Fish Fryers Ltd |
| British Franchise Association |
| 2. Market Size |
| THE TOTAL MARKET |
| Table 2: The UK Fast Food and Home Delivery Market by Value at Current Prices (£m at rsp), 1997-2001 |
| BY MARKET SECTOR |
| Table 3: The UK Fast Food and Home Delivery Sector by Sector by Value at Current Prices (£m at rsp and percent), 2001 |
| Sandwiches |
| Table 4: The UK Sandwich Sector by Value at Current Prices (£m at rsp and percent), 1997-2001 |
| Burgers |
| Table 5: The UK Burger Sector by Value at Current Prices (£m at rsp and percent), 1997-2001 |
| Fish and Chips |
| Table 6: The UK Fish and Chips Sector by Value at Current Prices (£m at rsp and percent), 1997-2001 |
| Pizzas |
| Table 7: The UK Pizza Sector by Value at Current Prices (£m at rsp and percent), 1997-2001 |
| Chicken |
| Table 8: The UK Chicken Sector by Value at Current Prices (£m at rsp and percent), 1997-2001 |
| Other Fast Food and Home Delivery Outlets |
| Table 9: The UK Other Fast Food and Home Delivery Outlets Sector by Value at Current Prices (£m at rsp and percent), 1997-2001 |
| 3. Industry Background |
| Recent History |
| NUMBER OF OUTLETS |
Text © 2002 Key Note
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Last updated by Amanda Porteous February 2004
