Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Consumer foodservice by chained/independent; Consumer foodservice by type;
Consumer foodservice by type and chained/independent
Executive summary
Consumer foodservice continues to grow
Consumer foodservice in New Zealand posted better than expected growth in
2006. Specialist coffee shops and bakery products fast food enjoy strong
current foodservice value growth in 2006. Chained specialist coffee shops was
the growth leader in terms of current foodservice value growth in 2006.
Repositioning towards healthier menus, improving outlet environments, and a
booming property market that is making New Zealanders feel richer, contributed
to this strong market expansion.
The cost noose tightens
Revenue growth was outstripped by cost inflation in 2006. This trend has led
to increasing pessimism within the industry and is considered the greatest
challenge faced by operators today. Rent and wage growth has put the most
pressure on operators' bottom lines. Many small operators have been driven out
of the market despite achieving good overall growth.
Costs are expected to continue rising over the forecast period, albeit at a
slower rate than that seen in 2006. Operators will need to drastically cut
costs and raise same-store sales to stay afloat. Prices will rise to
compensate, and there is some evidence that this is starting to happen.
However, price levels have been relatively static and changes are long overdue.
The consumer is the only winner
2006 saw competition heat up further. Cafés are becoming saturated in cities
and costs are on the increase without price rises to compensate. For many
operators, especially small ones without good economies of scale, competing is
necessary for survival. In reaction to this increasing competition, many
foodservice businesses have increased their outlet numbers in suburban areas,
reinvested in their outlet environments, and offered price incentives like
2-for-1 deals and loyalty cards. A price war may be the only way forward in
certain sectors, despite pressure for prices rises.
Foodservice consolidating
The market continued to consolidate over 2006. With the rare exception,
chained consumer foodservice -- with its depth of experience, expertise, and
finances -- is competing for consumer dollars better than independent consumer
foodservice, under current market conditions. This trend is expected to
continue over the forecast period.
The future looks bright for consumer foodservice in New Zealand
Strong but slow growth is expected over the forecast period. The boom enjoyed
by specialist coffee shops and other 100% home delivery/takeaway is expected
to continue. Rationalisation of the on-premises network in New Zealand,
towards more modern themed bars, will soon pay dividends. Prices will rise in
time to compensate for costs, and discretionary income will continue to
increase on the back of the good growth of the general economy.
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