| KN55012 |
| KEY NOTE Plus : Restaurants : July 2002 |
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This report covers: miscellaneous restaurants, burger restaurants, pub restaurants, pizza and pasta restaurants, roadside restaurants, Chicken restaurants, popularity of brands
Companies covered include: Ask Central, Burger King, City Centre restaurants, Compass Group, Kentucky Fried Chicken, McDonald's Restaurants, Pizza Express, Punch Taverns, Scottish & Newcastle, Six Continents,Whitbread,
EXECUTIVE SUMMARY
The UK restaurant market has been one of the most buoyant in the catering sector over the last 5 years. In 2000, the market continued to expand. The market includes both fast-food restaurants and other restaurants. The total restaurant market including fast-food grew in 2000 at current prices to £15bn. Price increases in the restaurant sector are a contributory factor to market growth.
Key sectors in the restaurant market are miscellaneous restaurants, burger chains, public-house restaurants, pizza and pasta outlets, roadside catering and chicken outlets. Pub restaurants registered their lowest annual growth for some years in 2000 as overcrowding and a lack of differentiation between brands hampered growth. Roadside catering registered steady growth in 2000, with improvements in menus and facilities. The pizza and pasta market experienced modest growth, due mainly to limited growth in the traditional High Street sector. However, the premium sector continued to expand. Burger restaurants witnessed only limited growth but chicken restaurants boosted sales as more restaurant-type outlets were developed in prime sites. The other restaurants sector includes a range of outlets and cuisines, from ethnic outlets through informal-dining concepts to premium outlets. The latter sector has experienced strong growth through the expansion of branded chains and trading up by consumers. The informal-dining and ethnic sectors have shown less impressive growth.
A relatively strong economy and increases in personal disposable income have helped to boost spending on eating out. The share of household food and drink expenditure taken by expenditure on food eaten outside the home is growing year-on-year. However, while demand for restaurant food continues to grow, the number of outlets has increased at an even faster rate and there are clear signs of overcrowding in some market sectors. Some of the leading chains have concentrated on outlet expansion at the expense of menu and outlet development and innovation, and the effect is likely to be a reduction in outlet numbers in the coming months as some underperforming brands are culled. Some of the more innovative menu ideas have come in the premium-restaurant sector.
The recent foot and mouth epidemic, travel problems, and the difficult UK weather in the summer of 2000 have all had some negative impact on the restaurant sector, but growth has still been achieved as eating out has increasingly become part of the leisure culture. In 2000, restaurants accounted for a larger share of the value of the total catering and restaurant market than in previous years.
The broad trends of the last few years are continuing in 2001, with further increases in disposable income and more restaurant choices continuing to boost sales. The possibility of some economic downturn and market saturation in some sectors are the key factors that are likely to limit growth from 2002 onwards.
TABLE OF CONTENTS
| Executive Summary | 1 |
| 1. Market Definition | 2 |
| REPORT COVERAGE | 2 |
| MARKET SECTORS | 2 |
| Miscellaneous Restaurants | 2 |
| Burger Restaurants | 2 |
| Public-House Restaurants | 2 |
| Pizza/Pasta Restaurants | 2 |
| Roadside-Catering Restaurants | 3 |
| Chicken Restaurants | 3 |
| MARKET POSITION | 3 |
| The UK | 3 |
| Table 1: The UK Catering and Restaurant Markets by Value at Current Prices (£m at rsp and percent),1997-2001 | 3 |
| The World | 3 |
| MARKET TRENDS | 4 |
| Increases in Disposable Income | 4 |
| Lifestyle Changes | 4 |
| More Restaurant Choices | 4 |
| Tourism Decline | 4 |
| Eating Out is a Key Activity | 4 |
| Organic Food Continues to Increase its Popularity | 4 |
| xxx | xxx |
| 2. Market Size | 5 |
| THE TOTAL MARKET | 5 |
| Table 2: The UK RestaurantMarket Including All Fast-FoodSales by Value at Current Prices(£m at rsp and percent), 1997-2001 | 5 |
| Table 3: The UK RestaurantMarket Excluding SandwichSales and Takeaways by Valueat Current Prices (£m at rspand percent), 1997-2001 | 6 |
| Table 4: The Retail Price Indexfor Restaurant Meals and AllCatering (January 1987=100and percent), February 2000to February 2002 | 7 |
| by MARKET Sector | 7 |
| Miscellaneous Restaurants | 7 |
| Table 5: The UK MiscellaneousRestaurant Market by Value atCurrent Prices (£m at rsp and percent),1997-2001 | 8 |
| Burger Restaurants | 8 |
| Table 6: The UK BurgerRestaurant Market by Valueat Current Prices (£m at rsp and percent), 1997-2001 | 9 |
| Public-House Restaurants | 9 |
| Table 7: The UK Public-HouseRestaurant Market by Valueat Current Prices (£m at rsp and percent), 1997-2001 | 10 |
| Pizza/Pasta Restaurants | 10 |
| Table 8: The UK Pizza/PastaRestaurant Market by Valueat Current Prices (£m at rsp and percent), 1997-2001 | 10 |
| Roadside-Catering Restaurants | 11 |
| Table 9: The UK Roadside-CateringMarket by Value at Current Prices (£m at rsp and percent), 1997-2001 | 11 |
| Chicken Restaurants | 11 |
| Table 10: The UK ChickenRestaurant Market by Valueat Current Prices (£m at rsp and percent), 1997-2001 | 12 |
| 3. Industry Background | 13 |
| Recent History | 13 |
| Number of Companies | 13 |
| Table 11: Number of VAT-BasedEnterprises Engaged in theRestaurant Industry, 1997-2001 | 13 |
| Table 12: Number of VAT-BasedEnterprises Engaged in theRestaurant Industry by TurnoverSizeband (£000, numberand percent), 2001 | 14 |
| EMPLOYMENT | 15 |
| Table 13: The Number ofEmployees in the RestaurantIndustry by Sex and Type ofContract (000), December2000 to 2001 | 15 |
| REGIONAL VARIATIONS IN THE MARKETPLACE | 15 |
| HOW ROBUST IS THE MARKET? | 16 |
| LEGISLATION | 16 |
| Minimum Wage | 16 |
| Part-Time Workers Regulations | 17 |
| Price Marking (Food & Drinkon Premises) Order 1979 | 17 |
| Working Time Directive | 17 |
| Labelling of Genetically-ModifiedFoods | 17 |
| Disability Discrimination Act 1996 | 17 |
| KEY TRADE ASSOCIATIONS | 17 |
| British Hospitality Association | 17 |
| HOTREC | 18 |
| Pizza, Pasta, and ItalianFood Association | 18 |
| Restaurant Associationof Great Britain | 18 |
| 4. Competitor Analysis | 19 |
| THE MARKETPLACE | 19 |
| MARKET LEADERS | 19 |
| Ask Central PLC | 19 |
| Burger King Ltd | 20 |
| City Centre Restaurants PLC | 21 |
| Compass Group PLC | 22 |
| Kentucky Fried Chicken(Great Britain) Ltd | 22 |
| McDonald’s Restaurants Ltd | 23 |
| Pizza Express PLC | 23 |
| Punch Taverns Group Ltd | 24 |
| Scottish & Newcastle PLC | 25 |
| Six Continents PLC | 25 |
| Whitbread Group PLC | 26 |
| OTHER COMPANIES | 27 |
| Conran Restaurants | 27 |
| Fish | 27 |
| Gaucho Grill PLC | 27 |
| Giardino Group PLC | 27 |
| Groupe Chez Gerard PLC | 28 |
| La Tasca Restaurants Ltd | 28 |
| Loch Fyne Restaurants Ltd | 28 |
| Nando’s | 28 |
| Pizza Piazza Ltd | 28 |
| Rank Group PLC | 28 |
| Signature Restaurants PLC | 28 |
| Simpsons of Cornhill | 29 |
| Welcome Break Ltd | 29 |
| Yo! Sushi Ltd | 29 |
| OUTSIDE SUPPLIERS TOTHE INDUSTRY | 29 |
| ADVERTISING AND PROMOTION | 29 |
| Table 14: Main Media Advertising Expenditure in the ChainRestaurants, and Restaurants, Public Houses and CateringSectors (£000), Years toDecember 2000 and 2001 | 30 |
| Exhibitions | 30 |
| Catering Forum | 30 |
| Caterer.com Live | 30 |
| Catey Awards | 30 |
| Hospitality Week | 30 |
| Hotel and Catering Exhibition | 30 |
| Hotelympia | 31 |
| Restaurant Show | 31 |
| 5. Brand Strategy | 32 |
| INTRODUCTION | 32 |
| Table 15: Leading UK RestaurantCompanies by Brands(number of outlets), 2002 | 32 |
| BRAND ADVERTISING | 33 |
| Table 16: Main Media Advertising Expenditure on Chain Restaurants,and Restaurants, Public Housesand Catering Brands (£000), Yearsto December 2000 and 2001 | 34 |
| RESEARCH FINDINGS | 35 |
| The Most Popular RestaurantBrands | 35 |
| Table 17: Penetration of ChainRestaurants Eaten In During thePast Year by Sex ( percent of adults),May/June 2002 | 35 |
| Use by Age | 36 |
| xxx | xxx |
| Table 18: Penetration of ChainRestaurants Eaten In During thePast Year by Age ( percent of adults),May/June 2002 | 37 |
| Use by Social Grade | 37 |
| Table 19: Penetration of ChainRestaurants Eaten In During thePast Year by Social Grade( percent of adults), May/June 2002 | 38 |
| Use by Region | 38 |
| Table 20: Penetration of ChainRestaurants Eaten In During thePast Year in the South of Englandand Wales ( percent of adults),May/June 2002 | 39 |
| Table 21: Penetration of ChainRestaurants Eaten in During thePast Year in the Midlands andthe North ( percent of adults),May/June 2002 | 40 |
| BRAND DEVELOPMENTS | 40 |
| McDonald’s | 40 |
| KFC | 41 |
| Six Continents | 41 |
| Pizza Express | 41 |
| Whitbread | 41 |
| 6. Strengths, Weaknesses, Opportunities and Threats | 42 |
| STRENGTHS | 42 |
| WEAKNESSES | 42 |
| OPPORTUNITIES | 43 |
| THREATS | 43 |
| xxx | xxx |
| xxx | xxx |
| xxx | xxx |
| 7. Buying Behaviour | 44 |
| HOUSEHOLD EXPENDITURE | 44 |
| Table 22: Household ExpenditureSpent Per Week on Restaurantand Café Meals, Takeaways Eatenat Home and Other TakeawayFood (£ and pence),1995/1996-1999/2000 | 44 |
| RESTAURANT VISITS | 44 |
| xxx | xxx |
| Table 23: Profile of Visits to UKRestaurants by Time of Visit( percent of adults), 1999 and 2000 | 45 |
| By Sex and Age | 45 |
| Table 24: Penetration of Visits toUK Restaurants by Time of Visitby Sex and Age( percent of adults), 2000 | 46 |
| By Social Grade | 46 |
| xxx | xxx |
| xxx | xxx |
| Table 25: Penetration of Visits toUK Restaurants by Time of Visitby Social Grade ( percent of adults),2000 | 46 |
| By Region | 47 |
| Table 26: Penetration of Visitsto UK Restaurants by Time of Visitby Region ( percent of adults), 2000 | 47 |
| Frequency of Restaurant Visits | 47 |
| Table 27: Frequency of Visitsto UK Restaurants by Time of Visitby British Residents ( percent of adults),2000 | 48 |
| FAST-FOOD RESTAURANTS | 48 |
| xxx | xxx |
| xxx | xxx |
| xxx | xxx |
| Table 28: Penetration of Visitsto Fast-Food Restaurants Excluding Takeaway Premises by Sex, Age,Social Grade and Region( percent of adults), 2000 | 49 |
| Frequency of Fast-FoodRestaurant Visits | 50 |
| Table 29: Frequency of Visitsto Fast-Food Restaurants toEat In ( percent of adults), 2000 | 50 |
| 8. Current Issues | 51 |
| CORPORATE ACTIVITY | 51 |
| Chez Gerard | 51 |
| Groupe Flo | 51 |
| Hartford | 51 |
| Madisons | 51 |
| Oriental Restaurant Group | 51 |
| Punch Taverns | 52 |
| Shimla Pinks | 52 |
| Wimpy | 52 |
| Go Eat! | 52 |
| Guidelines to Cut Fat, Saltand Sugar in Restaurants | 53 |
| The Consumer Attitudesto Food Survey 2001 | 53 |
| Where’s the Chicken? | 53 |
| Tourism Alliance | 53 |
| 9. The Global Market | 54 |
| International Markets | 54 |
| US Full-Service Restaurantsto Increase Sales by 4.5 percent | 54 |
| Australians Demand MenuDiversification and More ForeignInfluences | 54 |
| More Leisure Time in FranceEncourages Dining | 55 |
| Eating Out in Japan SuffersSales Decline | 55 |
| 10. Forecasts | 56 |
| INTRODUCTION | 56 |
| FORECASTS 2002 to 2006 | 56 |
| Table 30: The Forecast UKRestaurant Market IncludingAll Fast-Food Sales by Value atCurrent Prices (£m at rsp and percent),2002-2006 | 57 |
| By Market Sector | 57 |
| Miscellaneous Restaurants | 57 |
| Burger Restaurants | 57 |
| Public-House Restaurants | 58 |
| Pizza/Pasta Restaurants | 58 |
| Roadside-Catering Restaurants | 58 |
| Chicken Restaurants | 58 |
| MARKET GROWTH | 58 |
| FUTURE TRENDS | 58 |
| Demographics | 58 |
| Table 31: Population Projectionsby Age (000), 2000-2001, 2006and 2011 | 59 |
| Tourism | 59 |
| Eating-Out Share | 60 |
| 11. Company Profiles | 61 |
| Ask Central PLC | 62 |
Text © 2002 Key Note
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Last updated by Amanda Porteous February 2004
