Abstract
After a period of prolonged growth, restaurant operators have had to come to terms with weaker demand. This has come about through a combination of weakening of consumer confidence and stiffer competition from other sectors, such as pubs, which compete at the value end of the price spectrum. Although consumers do not want to eat out less frequently, there are indications that they are, or may seek to be in the future, trading down in terms of spend per head or the type of outlet they visit. While this is not good news for fine dining and mid-market chains, it will benefit those with a value proposition.
This report assesses the current status of the market and provides some pointers as to the future development of the industry and the major operators that compete within it. It also considers the hypothesis: "How do restaurants create a point of differentiation in a competitive marketplace?" and looks at how restaurants are adapting to changing market conditions and how they might need to respond in the future.
Main themes of the report:
- Responding to a rising cost base in terms of staff costs and conforming to increasing red tape.
- Coping with rising food prices, which are putting pressure on menu prices and margins.
- Dealing with increased competition from pub restaurants.
- Adapting to shifting consumer demand driven by weaker confidence levels and the credit crunch.
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