UK restaurant industry predicted to grow, despite increasing competition

The UK restaurant market is expected to reach a value of more than £20bn this year, with a 4% increase on last year. 

However, a new report from food insight leader MCA, reveals that the UK restaurant industry needs to better align supply with demand.

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MCA’s UK Market Restaurant report found that independent restaurants, especially local restaurants serving ethnic cuisine, make up 68% of restaurant sales worth about GBP£13.5bn.

However, the report revealed that independent restaurants in the UK are increasingly facing pressure as big brands and expand and cost pressures increase.

The report also said that whilst bigger branded restaurants have a significant presence and awareness, they only make up only a small part of the market.

Bigger restaurant chains only account for 28% of market sales worth about GBP£5.7bn, said the report. 

Although the MCA predicts that the UK restaurant sector will continue to grow, the analysts warned that the industry faces increasing consumer, competition and economic pressures. 

Simon Stenning, executive director of MCA, said: “Operators are going to be severely tested as growth increasingly depends on brand management, menu development, and driving existing store performance.

“Successful operators are able to push through customer spend increases above inflationary rates, without compromising recognition of value for money, undermining food quality, taste or their advocacy ratings.”

Data from CGA and Alix Partners also showed that small but fast-growing casual dining brands are expanding six times faster than their bigger restaurant competitors

Brands including Honest Burgers, Pho, and Le Bistrot Pierre were among some of the smaller restaurant groups that have expanded rapidly in the past few years, according to the research.

On the other hand, recognisable names such as Nando’s and Wagamama’s are among the larger chains which are expanding at a more steady pace. 

Paul Hemming, managing director of Alix Partners said: “Although it is clear the casual dining market has matured, the reality is tired offerings that fail to evolve have a limited shelf life in any environment.”