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Executive Summary

Table of Contents

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EXECUTIVE SUMMARY

The restaurant sector is one of the most dynamic markets in the UK catering industry. The broad definition of the UK restaurant market, used in previous Key Note reports, includes all table-service outlets, fast-food outlets, and takeaways. Using this definition, sales in 1998 reached £13.45bn, an increase of 8.3 percent on 1997. However, the detailed analysis in this report uses a narrower definition of the market that excludes sandwich shops and takeaway outlets, which cannot be classed as table-service restaurants. Using this definition, the restaurant market was valued at £9.63bn in 1998, an increase of 8.9 percent on 1997. Whichever definition is used, 5-year sales trends show that growth in the restaurant market has outperformed growth in the overall catering market between 1994 and 1998.
In this report, the restaurants market is divided into: pub-restaurants, with 1998 sales of £1.22bn; roadside catering -- £538m; pizza and pasta outlets -- £680m; burger restaurants -- £1.55bn; the `other restaurants' -- £5.64bn. The latter category is composed of a range of outlets including premium restaurants, ethnic restaurants and some fast-food outlets offering table-service. The majority of outlets are small, independent operations. All sectors of the restaurants market have experienced healthy growth in 1998, with burger restaurants and pub-restaurants performing particularly well.
Factors which have helped the sector to thrive in recent months include the stable economic environment, increases in personal disposable income (PDI), growth in tourist numbers and spending, more outlet openings, and the segmentation of the market by the leading players, with particular restaurant types targeted at specific consumer groups.
In 1998, there were 44,420 restaurant and café outlets registered for value-added tax (VAT) in the UK and most of these were small, locally-based businesses. However, consolidation has been a feature of the industry recently. The larger chain operators have been increasing their share of specific markets by extensive outlet opening and refurbishment programmes, supported by increased marketing and advertising. Leading operators across various market segments are Whitbread, City Centre Restaurants and Bass, while key brands in specific sectors are McDonald's, Burger King, and KFC (fast food), Pizza Hut and Pizza Express (pizza/pasta), and Granada (roadside catering). Main media advertising expenditure on restaurant and fast-food brands totalled £101.5m in 1998, an increase of 13.1 percent on 1997.
The factors that have boosted sales in the market since 1997 should continue to help sales growth in 1999 and 2000. Eating out associated with the Millennium celebrations will also help sales. In 1999, the market is expected to grow by 8 percent to reach £10.4bn, and by 2003 the market is forecast to increase to £13.07bn.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: The UK Restaurant Market by Sector by Value (£m and percent), 1998

Table 2: Sales in the UK Catering and Restaurant Markets at Current Prices (£m and percent), 1994-1998

Table 3: Share of UK Catering Market Taken by Restaurants ( percent), 1994-1998

Market Size

THE TOTAL MARKET

SELECTED MARKET SECTORS

Table 4: The UK Restaurant Market Including All Fast-Food Sales at Current Prices (£m and percent), 1994-1998

Table 5: The UK Restaurant Market Excluding Sandwich Sales and Takeaways at Current Prices (£m and percent), 1994-1998

Table 6: The UK Restaurant Market at Constant 1991 Prices (£m and percent), 1994-1998

Table 7: The UK Pub-Restaurant Market (£m and percent), 1994-1998

Table 8: The UK Roadside Catering Market (£m and percent), 1994-1998

Table 9: The UK Pizza Market (£m and percent), 1994-1998

Table 10: The UK Burger Market (£m and percent), 1994-1998

Table 11: The UK Other Restaurants Market (£m and percent), 1994-1998

Industry Background

INDUSTRY STRUCTURE

EMPLOYMENT

TRADE ASSOCIATIONS

Table 12: Number of Restaurants Registered for Value-Added Tax, 1992-1998

Table 13: Analysis of the Restaurant Industry by Turnover Size (number and percent), 1998

Table 14: Employment in the UK Restaurant Sector (000), 1997 and 1998

Competitor Analysis

THE MARKETPLACE

MAJOR COMPANIES

ADVERTISING AND PROMOTION

Table 15: Major UK Restaurant Operators and Key Brands, 1998

Table 16: City Centre Restaurants PLC - Outlet Numbers, 1997 and 1998

Table 17: Main Media Advertising Expenditure on Restaurants and Leading Brands (£000), Years Ending December 1997 and 1998

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

EATING OUTSIDE THE HOME

CUSTOMER PENETRATION

VISITS IN THE DAY

VISITS IN THE EVENING

FREQUENCY OF VISITS

Table 18: Average Weekly Expenditure per Person on Food and Drink Eaten Outside the Home by Region (£), 1997

Table 19: Average Weekly Expenditure per Person on Food and Drink Eaten Outside the Home by Income (£), 1997

Table 20: Visits to UK Restaurants ( percent), 1998

Table 21: Visits to Restaurants in the Day by Sex, Age, Social Grade and Region ( percent of all adults), 1998

Table 22: Visits to Restaurants in the Evening by Sex, Age, Social Grade and Region ( percent of all adults), 1998

Table 23: Frequency of Visits to Restaurants by British Residents ( percent of all adults), 1998

Outside Suppliers to the Industry

INTRODUCTION

FOOD AND EQUIPMENT

Current Issues

CORPORATE DEVELOPMENTS

NEW LEGISLATION

GENETICALLY-MODIFIED FOODS

ETHNIC RESTAURANTS SURVEY

Forecasts

SOCIO-ECONOMIC TRENDS

FORECASTS 1999 TO 2003

MARKET SECTORS

Table 24: Forecast of Retail Price and Average Earnings Increases ( percent change), 1999-2003

Table 25: Forecast of the UK Restaurant Market at Current Prices (£m and percent), 1999-2003

Table 26: Forecast of the UK Restaurant Market by Market Sector (£m and percent), 1999-2003

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HOPPENSTEDT BONNIER INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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