Casual dining restaurants see a fall in numbers for first time in nine years but pub decline slows
The number of casual dining restaurants in Britain fell for the first time in nine years as several chain operators were forced to close branches.
But there was better news for pubs and bars, with the closures of drink-led establishments slowing to 2.2 a day from the five year average of 3.6.
In the casual dining sector last year, Italian chain Carluccio closed branches including one at Silverburn in Glasgow under a CVA agreement to reduce its debts and a Jamie's Italian in Aberdeen shut its doors for good.
Branches of loss-making Giraffe and Ed's Easy Diner are reported to be under threat after owner Boparan Restaurant Group called in KPMG to shake up the business. Prezzo, Byron, Gaucho and Gourmet Burger Kitchen also axed branches.
The new edition of the Market Growth Monitor from CGA and AlixPartners found the number of casual dining outlets slipped by 0.1% from December 2017, through the total number of managed restaurants in Britain in December 2018 was 5,780 —27.3% or 1,241 more than just five years ago.
Outside the M25, there was a 0.9% drop to December 2018—but inside it there was a 1.5% rise. Managed restaurant numbers on the high street dipped 1.1% year on year, while suburban areas recorded 2.2% growth.
CGA vice president Peter Martin said: “The boom in managed restaurants has been one of the British economy’s great success stories of the past decade.
"But after a string of closures and CVAs in the casual dining sector in the last 12 months, the sector is now in net decline - albeit a very modest one. We can expect to see further contraction in numbers over the course of 2019.
“Many casual dining brands continue to thrive and we are seeing continued strong growth for small and medium sized groups in particular. Operators that have a distinctive offer, execute it brilliantly and select the right sites have a lot to look forward to - but for bigger brands that fail to keep pace with changing consumer habits and demands, the next few years may be a lot more challenging.”
Researchers put the slowing pace of pub closures down to sales driven by hot summer weather, the football World Cup and the rising popularity of craft beer, cocktails and artisan spirits.
Martin said: “The last decade has seen a relentless decline in Britain’s number of pubs and bars but there are welcome signs that the clear-out of unsustainable sites is starting to ease.
"With consumers’ drinking trends working in the sector’s favour, and food-led pub operators facing the same challenges as managed restaurants, the outlook for drinkers’ pubs is better than it has been for a long time.”
AlixPartners managing director Graeme Smith said: “Trade and private equity buyers are turning their gaze to pub and bar assets. This reflects not only the saturation of certain parts of the restaurant market, but also the combination of reduced supply and the continued rise of quality wet-led pub and bar operators.”
Article credit: Insider