eating out in the uk, 2009

EatingOut intheUK2009A ComprehensiveAnalysis of the InformalEating Out Market

EatingOut intheUK2009CONTENTS

1

3

5

7

21

31

57

73

88

ForewordBy Steve Easterbrook, Chief Executive,McDonalds

Executive Summary

Introduction & BackgroundMarket Definition and Segmentation

Chapter 1The Scale of the Informal Eating Out Market

Chapter 2Market History and Evolution

Chapter 3Consumer Insight

Chapter 4Eating Out Mega Trends

Chapter 5The Future of the Informal Eating Out Market

Bibliography

Eating Out in the UK,2009 is a comprehensiveanalysis of the InformalEating Out market. Thesector is one of the bigcontributors to the UKeconomy, but one of theleast understood.

From coffee shops to fast foodrestaurants, sandwich bars to pubs,the eating out market employs 1 in20 of the countrys workforce and atop ten industry but its impact onour lifestyles, economic activity, jobcreation and future growthprospects are rarely considered.

McDonalds sponsored thisindependent research fromAllegraStrategiesFood Strategy Forum todo just that, and better understandcurrent trends and tradingconditions, as well as forecast futuremarket developments.

The report is the first snapshot ofthe impact of the recession on themarket and consumer behaviour. Itreveals that the amount of spendingon eating out under 15 a head hasfallen for the first time in 40 years contrary to a popular view that thesector is booming as customerstrade down frommore expensivedining options.

It also shows that the choices facingconsumers arewider than everbefore as the number of places toeat out continues to grow despitethe decline in footfall.Themajorityof the industry leaders interviewedfor the report predicted that thesetoughening conditionswill lead tocasualties, cut backs and closures,putting some of the 1.36m jobs inthe sector at risk.

Through thousands of interviewswith consumers, the report findsthat habits learnt in this recessionwill be long-lasting.Only businessesthat canmeet the demand for valueand quality in both food and servicewill survive and prosper when thelong-term growth in eating outreturns. Excellent service,innovations that build loyalty,morechoice, lighter options, quality,provenance and an experience thatcannot be recreated at home theseare all things that customers willexpect and demandwithout payinga premium.

The number of people employed inthe sector will also continue togrow. Customer service is set tobecome amore importantdifferentiator for operators and thequality of training anddevelopment opportunities offeredto the workforce will be essential inunderpinning this.

As the market expands andthe number of attractive careeropportunities increase, it islikely well see a wider reappraisalof attitudes towards working inthe sector.

At McDonalds,wevemademassiveinvestments over the last threeyears in our restaurants, our foodand our people andwell invest afurther 90million in 2009 toensurewe continue tomeet theseevolving consumer demands.

The report emphasises that eatingout has become an ingrained partof life for people in the UK and onethat Government and policymakersshould take notice of. Long thoughtof as recession resistant, thismythabout the sector is now exposed.But whilst themarket is in decline,the sector is not falling as fast asother industries and there are somebrands doingwell despite currentconditions.With retail set to remainunder pressure, the Informal EatingOut sector will have an importantrole to play in helping pull the UKout of the recession throughgrowing employment and therevitalisation of the High Street, andthemarket will bounce back.However, only those businesses thatmeet the conditions of the recessionlegacy quality, value and a greatexperience will shape the futureof the sector.

A ComprehensiveAnalysis of the InformalEating Out Market

EatingOut intheUK2009

Foreword by Steve Easterbrook,Chief Executive, McDonalds

1 Eating Out in the UK 2009

Only businesses whichcan meet the demand forvalue and quality in bothfood and service willsurvive and prosper.Steve Easterbrook


Informal eating out isworth in excess of 40bn

Informal eating out has become aningrained part of life for UKconsumers,who relish theopportunity to enjoy food anddrink, and dining and socialexperiences, that cannot berecreated at home. This is reflectedin estimated sales of 40.3bn in2009, equivalent to averageannual spending per household of1,665

Allegras consumer research showsthat on average, 1 in 9meals areeaten out of the home every week,equivalent to an estimated 148millionmeals in 2009

40.3bn equates to 2.1bn spentat breakfast (5% of the total),17.1bn at lunch (42%), 16.7bn atdinner (42%) and 1.4bn atsupper/late night dining (3%).Both mid-morning and afternoonsnacks account for 3.0bn (8% ofthe total)

Consumerswill spend on average12.75 per week or 663 per year oninformal eating out in 2009 thiscompareswith 4.44 per week or230 per year in 1989

Over the last 40 years, the InformalEating Outmarket has taken anincreasing share of the totalexpenditure by consumers on foodand beverages reaching 22% in2009. This compareswith a 14%share in 1969

The sector is in the UKs top 10 byGrossValue Added, and is amajoremployer accounting for asignificant share of the 1.36millionfoodservice jobs across cafs,canteens, catering, pubs andrestaurants equivalent to 5% oftotal UK employment

A ComprehensiveAnalysis of the InformalEating Out Market

EatingOut intheUK2009

Executive SummaryBut, for the first timesince it was properlyestablished, the eating outmarket has contracted

The current recession hasdampened consumersshort-termappetite for eating out, and themarket is forecast to decline by0.5% in 2009

This negative growth is linkeddirectly to the recession,which isaffecting employment, jobprospects, household income,consumer confidence and, in turn,spending on eating out

Last year, 1 in 8meals were eatenout of the home.This year, it will be1 in 9

35% of consumers are eating outless now than theywere a yearago,while 20% plan to cut backover the year ahead

Instead, 32% of people are cookingat homemore, assisted by awealthof supermarket offers and dine-inranges, and driven by a growingdesire to specify the ingredientsthey use and eat more healthily

The hardest hit establishments arethose charging over 10 per headas consumers seek out greateraffordability.This hasmeant thatcasual dining concepts have seennegative growthwhile the fastfood segment has beenmorebuoyant

Eating Out in the UK 2009 4

The sector will bounceback, and play a key rolein the UK economicrecovery

Themarket will see amodestrecovery in 2010with growth of0.5% - 1.0%

Over themedium-long term, theestablished underlying trends ofrising affluence, growingmobilityand more youthfulolderconsumers will support strongergrowth in eating out. Following anOlympics boost in 2012, themarketis forecast to reach 47.5bn by 2014 a five year increase of 18%

Over the next five years, anestimated 3% - 5% increase inemployment is predictedwithinthe Informal Eating Out sector asthemarket expands to cater forgrowing demand raising theprospect ofmore favourableperceptions of foodservice careeropportunities

With retail set to remain underpressure, foodservice operators willplay a greater role in pulling theeconomy out of recession throughgrowing employment. This willcoincidewith the revitalisation ofthe High Street as amore leisure-oriented destination. The pace ofthis transitionwill, however, bedetermined by landlordssofteningin rental expectations

But the recession will leavea lasting legacy, and not allbusinesses will survive

This recessionwill mark awatershedperiod and lead to a lasting recessionlegacy inwhich consumers demandbetter value and an enhancedexperience but theywont bewilling to paymore for it

Operators will face greater challengesto improve profitability than has beenthe case over the past decade. It willbe harder to increase prices, andimproved efficiencywill bemoreimportant.Themarketplacewillbecomemore specialised andsegmented,with successful operatorsfocusingmore onwhat they are goodat and key points of difference

Informal Eating Outmarket winnerswill be those operators and suppliersbetter equipped to tap intoconsumers rising demand for bettervalue,healthier eating, convenience,authenticity, local sourcing andadded-experience. The bestperforming eating outestablishments are forecast to bethose that specialise in fast casual,healthier, British,Oriental and hotfood-to-go categories

Growing competitionwill increasethe importance of building customerloyalty and strengthening consumerrelationships. Foodservice operatorswill learnmore from grocery retailersabout developing sophisticatedloyalty schemes. However, the battlefor loyalty will be fought on severalfronts, including overall consumerexperience, customer recognition andalignment with their values

The future of informaleating out will be drivenby key mega trends

Healthy eating is a hugelyimportant consumer trend.While taste will remain ofparamount importance tocustomers when eating out, theyare only going to becomemorehealth conscious

Buying British, seasonality andauthenticity will continue to bepopular trendswith consumers already, 58% of people prefer toeat foodwhich is sourced fromthe UK.Operators will respond tothis withmore frequent changestomenus

Issues around sustainability andenvironmental impact will alsorise up the consumer agenda.More businesses will conductenvironmental and ethical auditsand produce detailed reports onthe progress beingmade againsta series of key performanceindicators and targets


Introduction & Background

Market Definitionand SegmentationThe Informal EatingOut market comprisesa wide variety of eatingout establishments andlocations from whichfood and beverages arebought and consumedout of the home.

This includes informalrestaurants; fast food andtakeaway outlets; coffee shopsand sandwich bars; retail grab &go and cafs; pubs; and cateringfacilities at leisure venues; travelsites and workplaces.

What this market does notinclude is food consumed athome, food prepared at homefor consumption out of home,low level snacking and formaldining. There is clearly a blurrydefinition between theboundary of informal andformal dining and this borderhas been set at an expenditureper head of 15 and over.Consequently, the InformalEating Out market can bedefined in terms of covering alleating out meal occasionsinvolving a transaction with aspend per person of 15 or less.

The major sub categories of theInformal Eating Out market aresummarised right:

SUB-CATEGORIES ANDDESCRIPTIONSWITHINTHE INFORMAL EATINGOUTMARKET

SUB CATEGORY CATEGORYDESCRIPTION

INFORMALRESTAURANTS

FAST FOOD &TAKEAWAYS

COFFEE SHOPS,SANDWICH BARSAND CAFS

RETAIL GRAB &GO, CAFS

PUBS

WORKPLACE

LEISURE

TRAVEL

Restaurant that offers asit-downmeal in a casualenvironment, typicallywith waited service

Outlets serving food thatcan be prepared andserved very quickly, andwithout waited service

Coffee and food-focusedcafs and bars, includingbranded andindependently managedestablishments

Combination of cafs andgrab& go ranges atassorted retailers,including c-stores,department stores, petrolretailers andsupermarkets

Public houses and barsselling food, includingmanaged and leasedoutlets

Sit-down and grab& gofacilities in theworkplace, but excludingvendingmachines

Includes locations wherefood and beveragesupports the primaryreason to visit, includingshopping centres, themeparks, sports arenas,music festivals andconcerts

Foodservice facilities forconsumers in transit including prior andduring travel

Carluccios,Nandos,Pizza Hut,Wagamama

Burger King, KFC,McDonalds,Wimpy

Costa Coffee, Pret AManger, Starbucks,Subway

M&S Caf, Sainsburys,Spar,Tesco,Wild BeanCaf

Beefeater,Harvester, JDWetherspoon,TobyCarvery

Assorted contractcaterers, brandedconcessions and in-house catering solutions

Assorted contractcaterers, brandedand independentconcessions

Little Chef, Roadchef,Upper Crust,WelcomeBreak

OPERATOREXAMPLES

Source: Allegra Strategies Analysis, 2009


Substantial research has been conducted inpreparing this study of the UK Informal Eating Outmarket. This has comprised four main activities:

ResearchBackground

SUMMARYOF CONSUMER, INDUSTRY EXECUTIVEANDMARKET RESEARCHACTIVITIES

ACTIVITY NOTES

CONSUMERRESEARCH

DESKRESEARCH

FOODSERVICEINDUSTRYSENIOREXECUTIVERESEARCH

INDEPENDENTOPERATORRESEARCH

2,000 household telephone interviews,representative sample, qualitative andquantitative questions

350 face-to-face indepth interviews in-store in12McDonalds stores

45 family eating out diaries, covering visitpurposes, occasions, venues, timings, spend andlikes and dislikes. Diaries maintained for a twoweek period,with the sample spread over a twomonth period running betweenMay June2009

Analysis and review of existing eating outmarket research

Reviews of news articles, trade press, industrywebsites and key operator reports and accounts

Synthesis with existing Allegra databases andreports

30 interviews with senior executives across thefoodservice sector, conducted via telephone andface-to-face

Analysis supported withmining of previousAllegra data and interview findings

100 interviews with independentcaf/restaurant owners/managers conductedvia online and telephone

Feedback captured on the specific issues andstrategic challenges facing the sizeable UKindependent operator sector



Chapter 1

KEY POINTS

The UK Informal Eating Outmarket is estimated to beworth a sizeable 40.3 billionin 2009

40.3bn equates to 2.1bnspent at breakfast (5% of thetotal), 17.1bn at lunch (42%),16.7bn at dinner (42%) and1.4bn at supper/late nightdining (3%). Both mid-morningand afternoon snacks accountfor 3.0bn (8% of the total)

Over the last 40 years, theInformal Eating Out markethas taken an increasing shareof the total expenditure byconsumers on food andbeverages reaching 22% in2009. This compares with just14% in 1969

Consumers will spend onaverage 12.75 per week or663 per year on informaleating out in 2009 thiscompares with 4.44 per weekor 230 per year in 1989

As of March 2009, 1.36 millionpeople were employed acrossthe restaurant & caf, pub &bar and canteen and cateringsector

In 2006, the Informal EatingOut market contributed 3% toGross Value Added this ranksit as one of the Top 10industries in terms ofcontribution to the UKeconomy

An estimated 7.7 billion mealsare eaten out of the home in2009 equivalent to 148million meals a week

On average, 1 in 9 meals areeaten out of the home everyweek. In early 2008, the figurewas 1 in 8, reflecting theimpact of the recession

The largest segments of theInformal Eating Out market interms of value are informalrestaurants (27%), pubs (23%),coffee shops/sandwich bars(17%) and fast food/takeaway(11%)

In This Chapter

The size of theInformal Eating Outmarket by value

The rise of themarket

The make up of themarket

The contribution ofthe market to GrossValue Added

Employment trends

The impact of therecession

The Scale of the InformalEating Out Market


Allegra estimates thevalue of the InformalEating Out market for theUK to be 40.3 billion in2009.

This is equivalent to averageannual household spending of1,665. This valuation assumes adecline of 0.5% in the InformalEating Out market over the period2008-2009 the first annualcontraction for over 40 years.This negative growth is linkeddirectly to the recession, which hasaffected consumer confidence,employment, household incomeand, in turn, household spendingon eating out. Despite this recentdecline, the compounded annualgrowth rate for the period 2004-2009 stands at 3.8%.

There has been positive, andconsiderable, growth in theInformal Eating Out market inthe last 40 years. Although therehas been a slight contraction in2009, growth is expected toresume in 2010.

The Size of theMarket by Value

Fig. 1.2 THE VALUE OF THE INFORMAL EATING OUT MARKET AT CURRENTPRICES, 1969-2009 - Million

Source: Allegra Strategies Analysis, ONS, 2009

1969

1,308

1974 1979 1984 1989 1994 1999 2004 2009

2,3625,302 8,474 13,087 17,618 24,689 33,341 40,452

Fig. 1.1 THE VALUE AND ANNUAL GROWTH OF THE INFORMAL EATINGOUT MARKET AT CURRENT PRICES, 2000-2009 - Million

Source: Allegra Strategies Analysis, ONS, 2009 Market Value Percentage change year on year

2000 2001 2002 2003 2004 2005 2006 2007 2008

27,86426,327 29,762 31,359 33,341 34,624 35,931 38,896

2009

40,452 40,250

6.60% 5.80%6.80%

5.40%6.30%

3.80% 3.80%

8.30%

4.00%

-0.50%

Note:The 0.5% market contraction is based on a number of sources, most notably quarterlyperformance insights from Crest, ONS Consumer Trends and assorted company trading results,as well as from economic forecast data and surveys of outlook prospects from restaurant andcoffee shop business leaders.


Expenditure on food out of the home has increasedconsistently, with particular acceleration since themid-1990s, when growth in the market began toovertake rises in disposable income. This is clearlyindicated in Figure 1.4 and only serves to illustratethe important role that eating out now plays in themodern lifestyle.

The Rise of the InformalEating Out Market

The 2009 market value of 40.3billion equates to 22% ofconsumers estimated totalexpenditure on food and beverageproducts of 187 billion and willclaim just over 4% of totalconsumer expenditure (ONS, 2009).Despite a slight dip in 2009, thisshare has steadily increased overthe past 40 years. Growth hasbeen driven by the physicalexpansion of foodservice operators,as well as an increasing number ofconsumers, as eating out becomesan integral part of peopleslifestyles. The changing landscapeof the High Street, now laden withcoffee shops, sandwich bars andfast casual concepts,is testament to the level ofdemand by consumers for informaleating and snacking.

Allegras consumer research showsthat 1 in every 9 meals is eaten outof the home, which translates to11% of all meals. In 2008,consumers ate 1 in every 8 meals(13%) out of the home each week.This average figure masks a widerange of eating out frequencies bydifferent consumer groups.Inevitably, it will have beenaffected by the recession. Manypeople are now opting to cookmore meals from scratch andentertain guests from their home and this trend is strengthened bythe increase in foodie culture aswell as the ever present celebritychefs in the media.

Fig. 1.3 THE VALUE OF THE INFORMAL EATING OUT MARKET AS APERCENTAGE SHARE OF TOTAL FOOD AND DRINK CONSUMED IN ANDOUT OF THE HOME


1969

14%1974 1979 1984 1989 1994 1999 2004 2009

15% 16% 16% 17% 18% 20% 22% 22%

Fig. 1.4 COMPARISON OF GROWTH IN INFORMAL EATING OUTEXPENDITURE AND DISPOSABLE INCOME - Index (100 = 1988)

1972

16

15

1976 1980 1984 1988 1992 1996 2000 2004

31

29

51

56

2008

72

75

132

142

221

196

279

233

339

261

172

172

100

100

Source: Allegra Strategies Analysis, ONS, 2009 Disposable income Informal Eating Out Market Value


The Informal Eating Outmarket comprisesinformal restaurants,fast food and takeawayoutlets, coffee shops &sandwich bars, retailgrab & go and cafs,pubs, the workplace,leisure venues and travellocations.

INFORMAL RESTAURANTS: An informal restaurant offers a

sit-down meal in a casualatmosphere with a spend perhead of 15 or under. Thepopularity of such restaurants ison the rise. There are numerousinformal concepts expandingwithin the market, with brandssuch as Gourmet Burger Kitchen,Nandos and YO! Sushi offeringonly a part waited service; as wellas concepts such as Giraffe andWagamama, offering full servicebut which remain fast,convenient and well priced.

FAST FOOD AND TAKEAWAY: The fast food segment offers no

waited service, but the ability tosit down within theestablishment. Fast food isusually a burger or a chickenoption. The price tag of a meal ata fast food restaurant is 3.69(NPD Group, CREST, 2009) whichis considerably lower than in aninformal restaurant. Leading fastfood brands include McDonalds,Burger King and KFC.

Takeaway, unlike fast food,typically does not provide seatingwithin the establishment.

The majority of takeaway food istaken home to eat or delivered tothe home. Takeaway in the UK,for the most part, is Ethnic food(Chinese/Indian/kebab) ortraditional fish and chips. In thevast majority of cases, takeawayoutlets are independently run.

COFFEE SHOPS/SANDWICHBARS/CAFS: The coffee shop market has seen

considerable growth in recentyears and is a common feature ofany High Street in the UK.Branded coffee shops such asStarbucks, Caff Nero and CostaCoffee have become householdnames in the same way that fastfood brands have. As well as thefamiliar brands, there arenumerous independent outlets.The caf culture which has sweptthe UK in recent years invitescustomers to drink coffee in awarm and inviting atmosphere.

Like coffee shops, there areseveral established sandwichbars in the UK Subway andGreggs across the entirety of theUK, and Pret A Manger and Eatwhich are commonplace in theSouth East. Unlike coffee shops,the environment offered insandwich bars is more gearedtowards grab & go and efficientorder transactions processing.

Traditional cafs are alongstanding feature of the UKInformal Eating Out market.Thought of by many as a place toget a fry-up and a cup of tea, thecaf still has sentiment withmany older and more traditionalUK consumers.

RETAIL GRAB & GO ANDCAFS: Supermarkets/convenience

stores/petrol stations offerconsumers food-on-the-movewith sandwiches, drinks andsnacks to choose from. With avast number of outlets, they are acommon choice for busyconsumers who want to eatquickly and cheaply. The grocerychain with the largest number ofoutlets across the UK is Spar(3,174) with the Co-operative closebehind (3,142) (The Grocer, May2009).

Many supermarkets and petrolstations, as well as departmentstores, also offer cafs as a meansto increase dwell time andcapture additional spending fromtheir customers. A few examplesinclude M&S Caf, DebenhamsStyle Caf, House of Frasers CafZest and BPs Wild Bean Caf.

PUBS: The total number of pubs in the

UK is estimated at 57,500 (BritishBeer and Pub Association). Agrowing share of pubs offer food,something which has becomeincreasingly important since theintroduction of the Smoking B-anin 2007 and its impact on alcoholsales. Ongoing closures of pubshave brought into question thelongevity of the pub in futureyears. However, in terms of outletnumbers, the pub remains one ofthe largest contributors to theInformal Eating Out market.

The Make upof the Market

The total number ofinformal meals eaten outof the home in 2009 isestimated at 7.7 billion.

Industry interviews reveal thattransaction numbers have held upreasonably well in the recession.Many operators have, in thisdownturn, fought to hold onto theirvolumes and market share, choosingto sacrifice their margins instead.The relative strength in volumenumbers will help to ensure theInformal Eating Out marketcontinues to expand in future years.

Coffee shops/sandwich bars andcafshas the highest number oftransactions with 1.5 billion. This isfollowed by fast food and takeawayand informal restaurants, each with1.3 billion transactions.

The Size of the Market by Transactions


THE WORKPLACE: Many larger employers provide

catering services for their staff frequently heavily subsidised,where the consumer pays anominal amount for a sizeablemeal. Certainly with many largeorganisations, the provision offood will be by contract caterers.Four of the largest in the UK areCompass plc, Sodexo, Aramarkand Elior.

LEISURE: Leisure refers to locations where

food is not the primary reason forvisit but where there is foodavailable. Examples includeshopping centres, shopping parks,theme parks, sports arenas, musicfestivals and concerts. Dependingupon the location, food can varyfrom branded outlets toindependent kiosks.

TRAVEL: Motorway Service Areas provide

motorists with fuel, foodserviceand retail outlets.The threelargest operators are Moto,Welcome Break and Roadchef.These providers have partneredwith leading High Street brands,such as McDonalds, Costa andMarks and Spencer, but alsoprovide their own brand cateringoffer. Other roadside restaurantsinclude Little Chef as well asnumerous independents.

Foodservice is also present withintrain stations and airports as wellas aboard trains and planes. Again,there are a scattering of brandswithin such locations as well asindependently ownedestablishments.

Of these market segments, informalrestaurants (27%), pubs (23%) andcoffee shops/sandwich bars (17%)take the largest share of the marketby value.

Fig. 1.5 SEGMENTAL SHARE OF THEINFORMAL EATING OUTMARKET BY VALUE, 2009

Source: Allegra Strategies Research and Analysis, 2009

Leisure (1.2bn) 3%

Travel Related (0.6bn) 1%

Workplace (3.0bn)7%

Retail Grab & Go and Cafs (4.4bn) 11%

fast food and Takeaway (Out of Home Only) (4.3bn)11%

Coffee Shops/Sandwich Bars/Cafs (6.7bn) 17%

Pubs (9.2bn) 23%

Informal Restaurants (10.9bn) 27%

Fig. 1.6 SEGMENTAL SHARE OF THE INFORMAL EATING OUT MARKET BYNUMBER OF TRANSACTIONS, 2009


Note:There is no double counting here. The travel and leisure segment as well as the workplacehave a lower number of transactions largely because many of the foodservice operators withinthese sites are brands and have been counted within their relevant segments.

Coffee/Shops/SandwichBars/Cafs

InformalRestaurants

Fast Foodand

Takeaway

Pubs

19% 17% 17% 16%

Retail GrabGo andCafs

14%

Workplace

12%

Travel andLeisure

5%


Fig. 1.7 SEGMENTAL SHARE OF THEINFORMAL EATING OUTMARKET BY OUTLETNUMBERS, MID YEAR 2009


Travel Related (4,744) 2%

Leisure (15,678) 6%

Coffee Shops/Sandwich Bars/Cafs (23,338) 9%

Retail Grab & Go and Cafs (27,276) 11%

Informal Restaurants (26,656) 11%

fast food and Takeaway (30,918)12%

Pubs (33,247) 13%

Workplace (88,609)35%

Outlet numbers acrossthe entire Informal EatingOut marketplace stand atan estimated 250,500 inmid 2009. While inoverall terms this figureis little changed from2008, this masks amodest increase in thenumbers of coffee shops,sandwich bars & cafs,offsetting the decline inthe numbers of pubs.

Coffee shops have benefited fromgrowing demand for specialitycoffee beverages and risingappreciation of caf culture.Indeed, for many, the coffee shophas become a third spacedestination (i.e. preferred placeoutside the home and theworkplace), usurping the pub inthe process. Pubs continue to bechallenged on several fronts notleast declining alcohol sales,stiffening off-trade competitionfrom the supermarkets, highlyleveraged parent businesses andthe fallout from the Smoking Ban.This is resulting in significantclosures. Closures have beenestimated at 35 a week in 2009,with numbers down by over 4,000since 2005, with smaller pubswith limited food offerings mostheavily impacted.

The largest contribution to thetotal outlet count is derived fromthe number of workplace facilities,with the estimated total of 88,600equating to a 35% share. Thisincludes workplace canteen andcaf units across business andindustry, education and healthcaresites, many of which are heavilysubsidised and also cater to aconsumer base outside the scopeof this market definition, not leastschool children and the infirm.These points help to explain therelatively low market share byvalue in comparison.

A key feature of this market is theimportance of lunchtime, and thishelps to account for significantgrab & go purchasing activity.Convenience-led retail outlets,including convenience stores,petrol forecourts andsupermarkets, capture a significantshare of this expenditure,particularly in larger urban areaswith high white collar workingpopulations. Several retailers, notleast Marks and Spencer and theleading supermarket chains, havealso blurred the retail/foodserviceboundaries by incorporating cafsand hot food-to-go counters.

The Size of the Marketby Outlet Numbers

Allegra estimates the number ofindependent outlets in 2009 to be108,400 43% of the total numberof outlets. The mix betweenbranded formats and independentsvaries greatly within the differentsegments of the Informal EatingOut market. For example, withinthe workplace, the provision of foodand beverages is largely throughcontract caterers. As a result, theproportion of independents is onlya small percentage. Within theinformal restaurant, caf andtakeaway segments, however, thenumber of independents farexceeds the brands. Relatively lowcapital investment and limiteddedicated skill requirements resultin independents accounting forbroadly four-fifths of the fast foodand takeaway and the informalrestaurant segments.


Gross Value Added,introduced by the ONSin 2005, measures thecontribution to theeconomy of eachindividual producer,industry or sector in theUnited Kingdom, and isone of the key economicindicators used formeasuring theperformance of a sector.GVA is used in theestimation of GrossDomestic Product (GDP).

The last available data for total GVAfor the UK was in 2006 and was1,177bn.The Informal Eating Outmarket as a proportion of GVA in2006 was 3.0% one of the top 10contributors. Similar sizedindustries include RecreationalServices and Computer Services.The largest contributors to GVA in2006 were Letting of Dwellings,contributing 7.2%, Constructionwith 6.3% and Education with 5.9%.

The Contribution of the Informal EatingOut Market to Gross Value Added (GVA)

Table 1.1 TOP TEN CONTRIBUTORS TO GROSS VALUE ADDED, 2006

GROSSVALUEADDED AT BASIC

PRICES (BN)RANK INDUSTRY

LETTING OF DWELLINGS

CONSTRUCTION

EDUCATION

RETAIL DISTRIBUTION

PUBLIC ADMINISTRATION AND DEFENCE

HEALTH AND VETERINARY SERVICES

BANKING AND FINANCE

WHOLESALE DISTRIBUTION

OTHER BUSINESS SERVICES

THE INFORMAL EATING OUT MARKET

84.8

74.0

69.3

65.2

63.0

62.1

60.2

45.9

42.1

35.9

1

2

3

4

5

6

7

8

9

10



Unlike previous periodsof economic decline, thisrecession has affectedindividuals across allsocioeconomic grades most notable is theadverse affect it has hadon white collar workers.

As a result, the sheer volume ofthose impacted by the recession isgreater than in previous recessions.Largely seen as discretionaryspending, eating out is one aspectwhere consumers are likely to cutback during a recession as manyconsumers have reduceddisposable income and/or concernsover their job security.

Allegras consumer researchhighlights that people are eatingout less across the board whethersacrificing a coffee in the morningor visiting restaurants lessfrequently. Allegras consumerresearch reveals that, althoughconsumers are eating out lessacross all establishment types, thehardest hit establishments havebeen those charging over 10, witha far larger percentage eating outless in these establishments thanin those charging less than 10.The inference is that informaldining is relatively well placed asestablishments are frequently ableto offer consumers good value fortheir money, at keen price points something which is of primeimportance to consumers during arecession when disposable moneyis limited.

The Impact of theRecession

The recession will lead to a number ofcasualties and portfolio rationalisationby weaker operators, as well as toseveral who might survive in the short-term, but for whom this is a mere stay ofexecution.John HutsonMMaannaaggiinngg DDiirreeccttoorr,, JJDD WWeetthheerrssppoooonn

The recession has elevatedconsciousness around value andconsumers are now much more savvyaround deals.Damian DixonCCoommmmeerrcciiaall MMaannaaggeerr,, MMaarrkkss aanndd SSppeenncceerr

Fig. 1.8 RESPONDENTS WHO ARE VISITING EATING OUT ESTABLISHMENTSLESS FREQUENTLY SPLIT BY TYPICAL SPEND PER HEAD

Source: Allegra Strategies Analysis, Consumer Research, 2009

Visit placescharging less than

5 per head

Visit placescharging 5-10

per head

Visit placescharging 10-15

per head

Visit places charging more than

15 per head

19% 16% 32% 41%


Looking more closely at the impactof the recession on a quarterlybasis and by market segment, it isinteresting to see how Ethnic andCasual Dining categories have beenthe hardest hit. Both operate atrelative high overall transactionvalues, whereas more affordableprice points exist within the fastfood Burger segment. In addition,there is a strong brand presencehere and leading chains benefitfrom significant consumer trustand higher marketing budgets.

The recession will also likely causea slight reduction in the number ofoutlets, particularly amongstindependents. Some established,weaker brands will also suffer andexit the market, whilst others willprosper and continue to add moreunits to the market. Brandsexpanding include Wetherspoons,Costa Coffee, Subway andMcDonalds. The closure ofunderperforming outlets, however,may not all be bad news. Newspace on the High Street, as well asfalling property prices, will provideopportunities for new entrants andthe fitter to expand. Allegrasexpectation therefore, is that theoverall outlet count will not bepermanently reduced as aconsequence of the recession.

An encouraging message alsoemerges from Allegras restaurantindustry executive research duringmid 2009. The research indicatesthat, whilst levels of concernamongst the industry over theeconomic environment in the lasteight months are still relativelyhigh, they are decreasing. This ishighlighted in Figure 1.10 andsuggests the economy is movingbeyond the worst of the recession.

Note: Values sourced from CREST data. There are specific definitions in the way the market isassessed: Burger refers to fast food hamburger and chicken; Ethnic refers to takeaway ethnicfood (Chinese, Indian, etc.);Sandwich and Coffee refers to coffee shops, cafs and ice cream shops;and Casual Dining refers to a sit down but informal meal.

Fig. 1.10 LEVEL OF CONCERN WITH CURRENT ECONOMICCLIMATE, 2009 VS. 2008

Source: Allegra Strategies Analysis, Industry Research, 2009

Highly Concerned Concerned Slightly Concerned Not Concerned

15% 51% 31% 37% 3% 9%43%11%

Sept 08

May 09

Fig. 1.9 QUARTERLY YEAR ON YEAR GROWTH IN SPEND IN SELECTEDINFORMAL MARKET CATEGORIES, Q2 07 Q1 09

Source: Allegra Strategies Analysis, NPD Group, CREST data, 2009

Burger Sandwich and Coffee Casual Dining Ethnic

Q207 Q208 Q307 Q308 Q407 Q408 Q108 Q409

6.2%6.4%

3.4%

2.3%

4.7%

0.0%-1.4%

1.8%

1.1%-1.6%

8.6%

7.7%

9.0%

-4.1%

-6.9%

-8.3%


As of March 2009, 1.36million people wereemployed across therestaurant & caf, pub &bar and canteen &catering sectors, whichequates to 1 in 20 of theUK workforce.

With 29.1 million people employedin total in the UK in March 2009,the sector accounts for 4.7% of theworkforce. This compares with theretail sector which accounts for10.8% of the workforce.

Restaurants & cafs comprised thelargest of these segments,accounting for 46% of the totalnumbers employed. The impact ofthe current recession is evident inthe 2009 figures with therestaurant & caf segment down1.3% and the pubs & bars sub-category falling by 2.3%. However,the longer-term decline in the pubsector is also illustrated withemployment numbers having fallenby 57,000 from their peak in 2005.

Numbers employed within therestaurant and caf marketsegment have increased steadilysince the mid 1990s, though growthhas slowed in recent years. The fallin employment from 2005 onwardscan be attributed to the fall in thenumber of pubs which hasdwindled in recent years.Employment in restaurants andcafs has only started to fall since2008 and is a result of weakenedeconomic conditions.

Employment Statisticsin the UK

Fig. 1.11 TOTAL EMPLOYMENT IN THE RESTAURANT & CAF, PUB & BAR AND CANTEEN & CATERING SECTORS,MAR. 2000 MAR. 2009

Source: Allegra Strategies Analysis, ONS, 2009 Restaurants & Cafs Pubs & Bars Canteens & Catering

2000

233.8

483.8 534.7

251

484.1

509.7

257.9

529.6

521.3

266.3?

559.6

523.4

271

583.4

548.3

259.1

596.9

550.9

243.7

616.2

543

226.6

622.2

526.7

242.9

626.2

505.6

243.7

616.3

494.1

2001 2002 2003 2004 2005 2006 2007 2008 2009


Figure 1.12 illustrates that themajority of people employedwithin the restaurant and cafsector falls within the smallestestablishment sizes those whichemploy 1-4 people. This serves tohighlight the importance ofindependents and smallerestablishments within themarketplace.

Looked at by gender split, andconcentrating purely on the largestsector restaurants & cafs, it isinteresting to note the balancingtrend that has occurred over thepast decade or so. While there arestill more females than menemployed in the sector, thedifference is by no means asmarked as was the case in the mid-1990s. This reflects acombination of factors, includingfemales taking on a wider varietyof job roles, relatively slowergrowth in part-time positions than full-time, and malesbecoming more attracted to thecareer opportunities.

Fig. 1.12 SHARE OF TOTAL EMPLOYMENT WITHIN RESTAURANTS & CAFS BYEMPLOYMENT SIZE BAND


1-4 5-9 10-19 20-49

54% 22% 13% 8%

50-99

2%

100-249

0%

250+

0%


In a similar fashion to the gender split, there has also been a process ofequalisation within the part-time and full-time roles within restaurants& cafs. This does not reflect a decline in the number of part-time jobsover the 1996-2009 period, merely that they have not kept pace with theincrease in full-time positions. Part-time jobs have increased by 82,000 toreach 326,000, whereas full-time positions have grown by 133,000 tostand at 292,000 in March 2009.

Fig. 1.14 PART-TIME AND FULL-TIME SHARE OF TOTAL EMPLOYMENT IN THE RESTAURANT AND CAF SECTOR, MARCH 1996 MARCH 2009

1996

60.5%

39.5%

1997 1998 1999 2000 2001 2002 2003 2004

58.7%

41.3% 38.7%

61.3%

13,067 17,618 24,689 33,34140,250

2005

38.5%

61.5% 60.9%59.5% 59.9% 56.5% 55% 53.8% 53.6% 52.8%56.5%

36.4% 39.1%43.5% 40.5% 40.1% 43.2% 45.1% 48.1% 48.4% 47.2%

63.6%

2006 2007 2008

24,689 33,34140,250

2009

Source: Allegra Strategies Analysis, 2009 Part Time Full Time

Fig. 1.13 GENDER SHARE OF TOTAL EMPLOYMENT IN THE RESTAURANT AND CAF SECTOR, MARCH 1996 MARCH 2009

1996

69.5%

30.5%

1997 1998 1999 2000 2001 2002 2003 2004

66.5%

31.5%

39.9%

60.1%

13,067 17,618 24,689 33,34140,250

2005

42.5%

57.1% 57.3%

53.5% 54.4% 53.9% 52.4% 50.5% 52.8% 52.7%54.4%

42.8% 42.7%45% 46.5% 45.6% 46.1% 47.6% 49.1% 47.2% 47.3%

57.4%

2006 2007 2008

24,689 33,34140,250

2009

Source: Allegra Strategies Analysis, 2009 Male Female


By industry sector, thehotel, catering and leisureindustry has the highestturnover rate 41% in2007 though morerecent figures areexpected to show a slightlowering (CIPD, 2008,Recruitment Retention andTurnover Report).

High employee turnover within thehospitality industry is partlyattributable to the constant flow ofstudents working part-time in pubs,bars and restaurants frequentlythese are first-time jobs. Two thirdsof workers within the hospitalityindustry have been in their job forless than two years (Survey, TheBuzz, 2008).

In a 2008 survey (CIPD), commonreasons cited for leaving a jobincluded: A change of career,promotion outside of theorganisation, level of pay, and a lackof career developmentopportunities.

The challenge for the foodservicesector is to devise a strategy fit toretain staff on a longer-term basis.This is increasingly difficult ascareer paths, particularly amongyoung workers, are getting morefluid with the notion of long-termloyalty to a company at risk ofdying out.

The recession, however, will havehad a positive impact on therecruitment and retention of staff.With a greater number of highcalibre candidates looking for work,the foodservice industry will be ableto entice some of these candidatesinto the sector. The necessity forcompanies within the industry towork on training and careerprogression will still remain in orderto retain these individuals beyondthe economic downturn.

Staff Turnover and Retentionwithin the Industry


Chapter 2

KEY POINTS

Towards the end of the 1900s,eating out becamesignificantly more affordableand accessible to all consumers

The emergence of the InformalEating Out market is directlylinked to increasing affluence,rising mobility and foreigntravel, and the growth inbranded restaurant concepts

The absence in Britain of astrong indigenous food culture,allied with its multi-culturalsocietal fabric, has enabled arich diversity of cuisine typesto flourish and resulted in atruly multi-national InformalEating Out market

A potted history...-1960s - New social freedomsand eating out concepts- 1970s - Tentative times forInformal Eating Out- 1980s - New faster foodfashions- 1990s - The emergence offast casual dining- 2000s - Caf culture takescentre stage

In This Chapter

Market historyand evolution 1960s to today

Case study 1 More mobileconsumers

Case study 2 Eating outdevelopment focuson Coventry

Case study 3 Timeline of UKopenings of selectedInformal Eating Outbrands

Market Historyand Evolution

The eating outmarket haschanged. Whenwas the last timeyou put a suit onto eat out?Stephen CliffordMMaarrkkeettiinngg CCoonnttrroolllleerr,, BBrraakkee BBrrooss

There is nowmuch greaterchoice and higherquality than everbefore. Brandshave becomemuch more evidentwith a strongeremphasis onfreshness andinnovation. Andconsumers havebecome far moreselective anddemanding. Ewan VentersFFoooodd aanndd CCaatteerriinngg DDiirreeccttoorr,,SSeellffrriiddggeess


A period of significantsocial change, with theformality and socialconstraints of previousdecades replaced bygreater acceptance andconfidence in individualexpression

First openings ofPizzaExpress andKentucky Fried Chickenin 1965 signal theemergence of theInformal Eating Outmarket

Widening of British foodtastes boosted by theintroduction of packageholidays and expansionof Indian restaurantsand takeaways with thegrowth in migrants fromthe Indian sub-continent

In one sense, the origins ofinformal eating in the UK arecenturies old and can be tracedback to the growth in trade andcommerce that accompanied theestablishment of many newsettlements and towns during theRoman occupation of c.50-400AD!However, in its contemporarysense, the Informal Eating Outmarket really began to take shapein the 1960s. The Swinging Sixtieswas a decade of revolution againstthe conservatism and socialconformity that characterised theausterity and rationing of post-war1950s. The 1960s were far moreprosperous years and hosted

several notable foodservicedevelopments as well assignificant cultural changes.

Re-introducing Italian inspiration,the pizzeria arrived complete withthe first purpose-built pizza ovenin the UK, with the originalPizzaExpress opening in London in1965. This year also saw Americanfast food influences taking root,with the establishment of the firstKentucky Fried Chicken. At thistime, Wimpy was in the vanguardof bringing burgers to Britons, orLondoners at least, with nine barson Oxford Street by the end of thedecade. Also influential in makingeating out more widely accessibleand, in contributing to it becomingmore of a leisure activity, was theemergence of bistros. Theseeateries provided casualenvironments and offered anassortment of mainly Frenchcountry options, including garlicmushrooms, ratatouille, moulesand pt.

The 1960s also saw Britons foodtastes being expanded by thegrowth in package holidays. Theserelatively cheap combinations offlights, transfers andaccommodation provided the first

chance for many people to haveaffordable travel abroad,particularly to Spain and Greece.

The growing British economy andan enduring legacy of post-warreconstruction led to labourshortages and resulted insignificant in-bound migration.The UKs largest wave of Indianmigrants arrived in the late 1950sand 1960s, quickly introducingspicier food items to consumerseating repertoires. In the process,Indian takeaways and restaurantsbecame familiar fixtures on shopparades across many major townsand cities. They joined theemerging Chinese takeaway sectorand provided welcome newalternatives to the substantialnumbers of traditional fish & chipshops.

Despite the emergingliberalisation, pubs remained abastion of masculinity withattendance viewed by generationsof men as sacrosanct. Food wasvery much secondary to drink, withwives expected to have mealsready at home particularly inmore industrial, working classareas outside London.

1960s New Freedoms and Eating Out Concepts

Major economic scarsfrom the fall-out of theOil Crisis in 1973 withhigh unemploymentand inflation

Growth in eating athome boosted by risinghousehold ownership ofdomestic appliances

Popularity ofsteakhouse pub chains

In many respects, growth in eatingout activity was on hold during the1970s. The first half of the decadewas a period of significanteconomic and political uncertainty,with oil price shocks, power cuts, amajor recession and substantialunemployment. However, whileconditions improved as the decadeprogressed, eating out appetiteswere also dampened by majoradvances in electrical appliancesthat improved the quality ofdomestic life. The penetration ofrefrigerators, freezers and colourTVs among UK households grewstrongly by 1978, more than 90%of households owned a fridge andover 40% possessed a deep freezeor fridge freezer.

Growing TV viewing madehousehold names of cooks RobertCarrier, Fanny Cradock and Graham(Galloping Gourmet) Kerr. Theyencouraged more consumers to bemore experimental and confidentin the kitchen, and provided a fillipto in-home entertaining. Theleading grocery chains alsosupported improved dining-in,with initial moves towards openinglarger superstores and offering farmore varied assortments, including

new, ready-prepared frozen foodssuch as lasagne, gateaux and boil-in-the-bag fish.

Pubs, in particular, benefited fromthe convenience advantages offrozen food and many introduceda selection of chicken, sausages,burgers or scampi, served withchips in a basket. The solidtradition of the roast dinner alsobecame part of the eating outexperience. It became thecentrepiece of carvery-styleoperations, with the roast meatcarved from the joint at thecustomers request. Pub chainsteakhouses also emerged suchas the Berni Inn and Beefeaterbrands continuing thetraditional British fondnesstowards relatively plainly cookedmeat. Indeed, red meat wasdished up on a regular basis, withthe average person consuming450g per week double theconsumption level of today.

Red meat-eaters were alsodelighted with the arrival ofMcDonalds into the UK in 1974,with Burger King following threeyears later. As with previous newchain openings, London wastargeted for market entry. Togetherwith Pizza Hut also making itsdebut, the informal element ofeating out was beingstrengthened.

The 1970s also saw the introductionof equal pay for women and bettereducation regarding contraception,resulting in more females enjoyingimproved career prospects. Theenhanced spending power, andreduced time for at-home mealpreparation, would become anincreasingly important InformalEating Out market growth dynamic.Indeed, Figure 2.1, highlights howfemale employment has increasedstrongly since the early 1970s, risingby 4.3 million or 49% over the 1972-2008 period.


1970s Tentative times for Informal Eating Out

Fig. 2.1 GROWTH IN FEMALE EMPLOYMENT AND SHARE OF TOTALEMPLOYEES NUMBERS. UK 1972-2008

Note: Includes part- and full-time employment Source: Allegra Strategic Analysis, ONS, 2009

1972

9,107

37.1%

37.1%

1976

9,537

1980 1984 1988 1992 1996 2000 2004

38.5% 40.1% 41.7% 43.1% 44.9% 45.5% 45.7%

2008

10,052 10,124 11,247 11,478 11,868 12,573 13,080 13,549

45.9%

Share of total % Female Employment in 000s

46.0%


Period of strongeconomic growth andrising materialism

Emergence of moresophisticatedsandwiches both fromMarks and Spencer andfirst Pret A Mangerstore opening

Rapidly expanding fastfood segment

The 1980s split opinion to some itwas a decade of greed andconspicuous consumption, toothers, it was a period ofentrepreneurship and possibility. Agrowing divide certainly emergedbetween the rich and poor, withbetter off families paying less taxand enjoying the growingabundance of new food options including nouvelle cuisine.

What is clear is that the eightiesmarked a period when several keysocietal trends that we recognisetoday became evident not leastthe emergence of working women,falling household sizes and therising importance of convenienceand healthy eating. These factorscontributed to the 1980s beingcharacterised by two things themicrowave and the sandwich.More specifically, Marks andSpencer began selling its popularsandwiches and Prawn &Mayonnaise was quicklyestablished as the best seller.

Taking inspiration, small andindependent bakers sought somecompetitive protection from theburgeoning supermarket multiples

and started offering more preparedoptions to appeal to the growingtake away market. Greggsexpanded its store portfolio, whilePret A Manger opened for businessin 1986. The fast food operatorsalso moved to embrace healthierdevelopments. Wimpy was thefirst to introduce a vegetarianoption with its Spicy Beanburger,while McDonalds became the firstchain to provide nutritionalinformation for the benefit ofconsumers.

In terms of leading restaurantbrands, back in 1983, the largestchain was operated by Little Chef,with over 310 outlets. This wasfollowed by Berni Steak Housesand Cavalier Steak Bars, as Britonslove affair with red meat endured.However, by the end of the decade,Little Chef was usurped byMcDonalds, with its growingcoverage of Great Britain nudgingit towards the 400 mark.

Competition in the fast food sectorwas also strengthening, both fromthe introduction of new productsand entrants. Chicken nuggets andmeal options for kids were addedto menus, with new competitorsemerging in the form of Dominos,Taco Bell and Wendys. In addition,and at the lower end of theculinary spectrum, kebab shopswere given a huge fillip bycomedian Harry Enfields Stavroscharacter.

While not all new players were toprove successful, the ground wasbeing prepared for a new breed ofeating out genre one thatcombined fast convenience with amore sophisticated, yet casualinformality.

1980s New faster food fashions


Rising social mobility,household wealth andliving standards

Proliferation andinternationalisation offast casual and quickservice dining concepts

Emergence of gastro-pub segment

The 1980s may have paved the way,but the 1990s represented agenuine step change in theevolution of the Informal EatingOut market. Exciting new brandedconcepts emerged, and tried andtrusted brands expanded theirreach significantly. In the process,eating out became a more routinepart of many more lives.

In particular, the value mid-marketrestaurant sector grewexponentially during the 1990s.Appealing to a large segment ofconsumers looking for somethingstylish yet safe, PizzaExpress wasjoined by a raft of pizza & pastabrands, including Ask, Carluccios,Strada and Zizzi. Opening up newfrontiers was the emergence of theinnovative yet accessible,Wagamama, which debuted in1992. Offering non-specificOriental food at affordable pricesand with open kitchen practices,this was an exciting new additionto the informal scene. And thesame could be said for YO! Sushi.Opening its first outlet in 1997, YO!Sushi brought Japanese-inspirednew food and restaurant practicesto the UK.

Without question, consumers weredeveloping more sophisticatedtaste buds and demanding spicierfood. In 1992, South African-based,but Portuguese-inspired, Nandosbegan capitalising on this throughits flame-grilled peri-peri chickenranges. Nandos also helped tocreate a new space in the informalmarket with its pay first, but table-served approach.

The upward trajectory of all thingsAsian boosted the opening of a raftof independent Thai restaurantsand the popularity of Indian foodin the 1990s helped to raise theprofile of Chicken Tikka Masala tofavoured national dish status.

Pubs also caught the Asian bug,expanding menu options and, in anumber of cases, sub-contractingout kitchens and converting entirefood assortments over to Thaicuisine. Indeed, the pub sectorgrew strongly during the mid-late1990s on the back of a burgeoningcatering business. Several smallerpub chains and independentsraised the bar on their foodstandards by joining the pub-restaurant movement with theterm gastro-pubs beingintroduced to describe moreupmarket establishments.

Concentrating on higher footfallurban areas, were a couple of newentrants to the sandwich sector.Eat and Subway both opened in1996 and offered healthieralternatives within the market but to different target audiences.Taking more than a littleinspiration from Pret A Manger, Eatwas also aimed at office workers.By contrast, US-based Subway

offered more youthful appeal andintroduced a customised sandwichproposition to the market via itsfranchise-based business model.

Also helping to consolidate themore affordable end of theinformal market were a number ofnotable developments within thecoffee shop sector. Starbucksarrived in the UK via its acquisitionof the Seattle Coffee Company in1998, while the emerging businessdevelopment possibilities did notgo unnoticed by several othersizeable operators. Whitbreadacquired Costa Coffee in 1995,Nestl opened its first Caf Nestlin 1997 and McDonalds purchasedthe Aroma chain two years later.This emerging market segmentwas certainly stirring, but fewwould have predicted thephenomenal growth that wouldoccur in the new Millennium.

1990s The emergence of Fast Casual dining

Rapid expansion ofbranded coffee shopsand increasinglypervasive caf culture

Emergence of healthierquick service chainsand a newpremiumised sector

End of decade recessionreins in consumerspending and marketexpansion

In many ways, it is odd to talkabout the noughties as the time ofthe coffee shop as this concept hasexisted in the UK in a generic cafformat for much of the previouscentury. Moreover, even on a moretightly defined basis as a venuespecialising in roast and groundcoffee, there was over 1,000branded coffee shops by 2000.However, this is to ignore both thehuge growth this market segmentwould go on to achieve and also itsprofound impact on the broaderInformal Eating Out market.

Market leaders, Costa Coffee andStarbucks, both now operate over700 units alone, and there will bewell over 4,000 branded coffeeshops by 2010. This growth hasbeen facilitated by coffee shopsexpanding across the UK, and inmany ways, usurping the pub asBritons preferred third space. Inaddition to their core stores, theleading coffee chains have openedconcessions in book stores, gardencentres, department stores andsupermarkets, and developed

express kiosks to trade fromsmaller footprints at travel hubs.

Not to be out-done, a host of non-specialist operators have exploredtheir own ways to capitalise onconsumers growing demand forcoffee. Marks and Spencerlaunched its Caf Revive concept in2000 and is now the UKs fourthlargest caf operator. Petrolforecourt specialist, BP, hasdeveloped a chain of over 200 WildBean Cafs, while motorwayservices area operator, WelcomeBreak, has successfully introducedits own Coffee Primo brand. Inaddition, many pub chains arefighting back by strengtheningtheir speciality coffee offers, notleast JD Wetherspoon through itstie-up with Lavazza, and GreeneKing with Coffee Republic.

An important point that manynon-specialist operators arelearning from the leading coffeechains is that it is not just aboutthe coffee. The branded chainshave prospered becausefundamentally they are selling anexperience that consumers buyinto. The combination of therelaxing atmosphere, a carefullydesigned in-store environmentand, increasingly, free newspapersand Wi-Fi, offer a proposition thatsimply cannot be re-created athome and this has been a keydriver behind the strong InformalEating Out market growth ofrecent years.

Working alongside the marketgrowth dynamic provided by therise of caf culture, has been thesubstantial expansion of branded

concepts. The UK store portfoliosof Greggs, McDonalds and Subwayall passed the 1,000 mark duringthe noughties and have by nomeans reached saturation points.Providing a useful indicator of thescale and importance of thebranded chains is the fact thattoday, to be a Top 10 operatorwithin the Informal Eating Outmarket, a minimum estate size of500 outlets is required. As recentlyas the early 1980s, 50 would havebeen sufficient.

At the same time, it has not allbeen plain sailing for brandedoperators. A number of playershave come and gone, eitherthrough closure ortakeover/conversion of under-performing businesses. During the2000s, examples within the cafsector include Benjys, Madisonsand the phasing out of the BakersOven brand. Previously, and withinquick service restaurants, Arbys,Happy Eater, Pizzaland, Taco Belland Wendys have closed down.

Indeed, it would be misleading tosuggest that the noughties havejust been about the leadingbrands. Food culture hasdeveloped appreciably and a hostof green shoots have emerged,many supported by savvymarketing and an eagerness to tapinto a variety of established andemerging consumer trends. Saladbar concepts, Chopd and Tossed,are targeting convenience-drivenconsumers looking for healthyoptions delivered with personality.This can also be said of Leon andSnog. >>>

2000s Caf culture takes centre stage



>>>Certainly prior to the recession,premiumisation was drivingmargins and putting smiles onoperators across the eating outsector. It helped the developmentof several more indulgent bakery-led concepts, including Baker &Spice, Le Pain Quotidien and Princi.Interestingly, these businessescomprise retail and

foodservice functions. The samealso applies to upmarket eaterie,Ottolenghi, and to earlier pioneer,Carluccios.

Also significant is that growingnumber of operators are offeringconsumers increasingly differentpropositions across the daypartsvia extensive daily opening hours.

Indeed, while the noughties havebeen characterised by boomingcaf culture, they are also verymuch about the emergence of a24/7 society. Consumers arebecoming ever more switched onand demanding much more ontheir own terms and this is animportant marker for how themarket will evolve going forward.

UK residents havebecome increasinglymobile over the past 50years

This is evident in greater carownership and access to cars,more people on the road andspending more time travelling,and greater numbers ofcommuters. All of these factorshave been beneficial and helpedsupport the rise of the InformalEating Out market. This isthrough:

Providing greater access forconsumers to a wider choice ofeating out establishments

Increasing the opportunities foroperators to tap into more outof home meal occasions

Stimulating demand forproducts designed for grazingon the hoof and dashboarddining, and boosting use ofdrive-thrus

Particularly across the 1970s and1980s, the proportion of adultswith a full car driving licenceincreased strongly, and nowstands at just over 7 out of every10 adults. Unsurprisingly, carownership has also increased, andnow averages 1.14 cars per UKhousehold.

More Mobile Consumers

Case study 1

Fig. 2.2 PERCENTAGE OF ADULTS WITH FULL CAR DRIVING LICENCE, UK 1975-2006

Source: Allegra Strategies Analysis, Department for Transport, 2009

1975/1976 1985/1986 1995/1996 2005/2006

48% 57% 69% 72%

Fig. 2.3 BILLIONS OF KILOMETRES TRAVELED BY BRITONS WITHINGREAT BRITAIN, 1971-2007

Source: Allegra Strategies Analysis, ONS Social Trends, 2009

1971 1981 1991 2001

419 495 681 7652007

817

In addition, there has beensignificant growth in the numberand length of journeys beingundertaken by Britons over thepast 40 years. The Office ofNational Statistics reports a nighon doubling of kilometrestravelled within Britain over the

1971-2007 period. Growingemployment and commuting hascontributed strongly to this, andit is interesting to note that theaverage UK commuter nowspends the equivalent of 26working days a year commuting.(Work Wise)


Coventry is a relativelytraditional city inMiddle England with apopulation of just over300,000.

While the profile of its populationhas taken on a greater Asiancomposition, over the past 40years it has not seen significantpopulation growth and, as such,provides a useful mini case studyfor more closely exploring howthe assortment of its variouseating out establishments haschanged. Using data sourcedpurely from Yellow Pages, it isinteresting to see how varioussub-categories have grown (orotherwise), since 1978. Keyfindings include:

Significantly greater presenceand diversity in takeaways andrestaurants

Growth in cafs and sandwichshops

Halving in numbers of fish &chip shops and pubs

Emergence of branded chains

While it is predominantly outsidethe out of home scope of thisInformal Eating Out market, thestrongest growth has occurredwith takeaway food shops,including various ethnic, pizza andkebab outlets. Significant growthhas also taken place withinrestaurants, with this includingcontributions from both brandedchains and independents. Indeed,it is insightful to see thesubstantial segmentation of sub-

Eating out developmentfocus on Coventry

Case study 2

categories employed within therestaurant section of the 2008Yellow Pages. This now includes:American, African, Armenian,Austrian, Bangladeshi, Belgian,Caribbean, French, Greek, Indian,Indonesian, Irish, Japanese,Korean, Kurdish, Lebanese,Malaysian, Mediterranean,Mexican, Middle Eastern,Mongolian, Moroccan, Nepalese,Polish, Portuguese, Russian,Scottish, Spanish, Thai, Turkishand Vietnamese.

Cafs & sandwich bars showparticularly strong growth overthe past decade, which is verymuch in keeping with the rise ofcaf culture in the UK in general.This segment is also interestingfrom some of the names of sub-categories that have been used.Back in 1978, this included snackbars, ice cream parlours and milkbars, descriptions that havelargely disappeared since. Newersub-categories have emerged inthe form of internet cafs andpottery & ceramic cafs.

Unsurprisingly, fish & chip shopshave lost out to the substantial

growth in competition fromother takeaways and restaurants.The other major loser in thisanalysis has been public houses.Again, this is in line with widerUK trends, but the magnitude ofthe decline within Coventry willhave been greater owing to itsCity status, and a heavier skewtowards smaller, beverage-ledestablishments.

The expansion in eating outestablishments has also served tochange the retail landscape ofCoventrys central shopping areasand suburban shop parades. Theretail/foodservice mix hasevolved to include a muchstronger and higher qualityeating out provision, comparedwith the more pub dominatedmarket back in the 1970s. Andwith many non-food retailersstruggling and closing, theexpanded foodservice offer ishelping to maintain footfall andreduce the number of vacantunits. Certainly, within the morecentral and higher rental areas,there is a stronger foodservicepresence, but this is focusedaround leading brands.

Table. 2.1 GROWTH IN NUMBER OF EATING ESTABLISHMENTSBY TYPE, COVENTRY, 19782008

Type of Establishment

Cafs & Sandwich Shops

Fish & Chip Shops

Public Houses

Restaurants

Takeaway Food Shops

TOTAL

43

61

256

59

27

446

1978

24

63

227

93

63

470

1988

29

52

219

107

124

531

1998

64

31

127

144

168

534

2008

21

-30

-129

85

141

88

Growth1978-2008

Source: Yellow Pages

The origins of themodern day InformalEating Out market canbe traced back to the1960s. Pioneers,Kentucky FriedChicken andPizzaExpress,introduced new eatingideas and paved theway for a host of newrestaurant concepts.The pace and variety of openings increasedin the 1990s and thismomentum andburgeoningheterogeneity has beencarried through intothe new millenium.

Timeline of UK Openingsfrom Selected InformalEating Out Brands

Case study 3


Fig. 2.3 TIMELINE: THE UK DEBUTS OF SELECTED INFORMAL EATINGOUT BRANDS, 1960s-2000s

Source: Allegra Strategies Analysis, Companies, 2009

1960s 1970s 1980s 1990s

1965 KentuckyFried Chicken

1965 Pizza Express

1960sNew socialfreedoms andpioneeringeating outconcepts defineinformal origins

1970sDifficulteconomic timesand more focuson eating athome than out

1980sNew fast foodfashions,includingburgers, readymeals &sandwiches

1990sThe emergenceof fast casualdining withmany excitingnew players

2000sRise of cafculture andbirth of manynew healthier,niche andpremiumbrands

1971Costa Coffee

1973Pizza Hut

1974McDonalds

1977Burger King

1980Wendys

1985Dominos

1986Pret A Manger

1992Wagamama

1992Nandos

1995Eat

1996Subway

1997YO! Sushi

1998Giraffe

1998Starbucks

2000s

2001Apostrophe

2001GourmetBurger Kitchen

2004Chopd

2004Leon

2005Canteen

2005Sacred

2005Tossed

2008Jamies Italian


Chapter 3

KEY POINTS

Some 148millionmeals areeaten out of the home everyweek in the UK

On average, this equates to 1 inevery 9meals. Significantvariation lies around this figure 16% of the British public eatfivemeals or more out of thehome every week, and 19% eatnomore than onemeal afortnight

Most people (81%) view eatingout as a treat. However, peopleare not just eating out onspecial occasions. A highpercentage are doing so forsocial reasons, to spend timewith their friends and family

London is the Eating OutCapital of the UK Londoners,on average, eat threemealsaway from home every week.People fromNorthern Irelandeat out the least, eating onaverage less than twomealsout of the home

Lunch is king! 43% of people eatlunch out of the home at leastonce a week

Coffee shops and sandwich barsare the favourite weeklydestination 34% of consumersvisit one at least once a week

Local pubs are holding theirown rumours of extinctionare grossly exaggerated. Thepub is particularly popular withyoung adults and the over 65s.

This illustrates the sentimentthat the pub holds with UKcitizens across the board

Quality and taste of food, aboveprice, is the key determinant forconsumers looking for valuewhen eating out

People have been reining intheir eating out 35% of peopleare eating out less than theyhave been in recent yearscompared with just 10%whoare doing somore often

There is amixed response as towhether eating out has becomemore or less affordable inrecent years consumers err onthe side of believing eating outto be less affordable but thiscan be attributed directly to therecession and the impact it hashad on consumer confidence

Lower priced establishmentsare currently proving popular 74% of diary keepers ate outin establishments where theprice of their meal / snack wasunder 5

The year aheadwill be animprovement on the last 12months but will remain adifficult environment for theeating out market. 20% ofpeople claim they will be eatingout less over the year aheadcompared with half thisproportion expecting to beeating out more

In This Chapter

Key motivations andprimary occasionsfor eating out

Eating out behaviour when, where andhow often

The popularity ofdifferentestablishments

Key influences whenchoosing somewhereto eat out

Spend patterns andaffordability

Changing eating outhabits amongstBritons

The trend insnacking versuseating structuredmeals

Case studies acrossdifferent regions andage brackets,including DiningDiaries

Eating out in thenext 12 months

ConsumerInsight


For many, eating out isan integral part of theirlifestyle. This is a directeffect of a multitude offactors, including moremobile lifestyles, theever-widening availabilityof food, the social benefitsof eating out and a desireto broaden palates.

While these factors arecontributing to the long-termunderlying trend of eating out,people continue to see theoccasion as a treat.

Going out for foodis a treat, I only goout to eat differentthings that I don'thave at home.Female1166--2244,, PPeetteerrbboorroouugghh

It's a treat becauseit breaks themonotony of cookingfor the day.Male3355--3399,, LLeeiicceesstteerr

In support of the notion thateating out is a treat, consumersheavily disagreed with the notionthat a busy lifestyle forced them toeat out frequently. 81% of peopledisagreed that they ate out veryoften because of a busy lifestyleand 78% disagreed to some extentthat they rarely had time to cookproper meals at home.

Key Motivations and Primary Occasions for Eating Out

Fig. 3.1 EATING OUT AS A TREAT - I regard eating out as a treatPercent of Respondents


Agree Strongly

Agree Neither Disagree

29% 52% 9% 9%DisagreeStrongly

1%


The motivation behind consumersgoing out to eat is closely linked tothe notion of it being a treat and asa key part of their social lives. Themost common reasons given byindividuals for eating out of thehome were dining out with friends(21%), or family (20%) and goingout for a special occasion (21%).

Fig. 3.2 ATTITUDINAL STATEMENTSPercent of Respondents

Source: Allegra Strategies Analysis, Consumer Research,2009

I rarely have timeto cook propermeals at home

I eat out veryoften because ofmy busy lifestyle

12%9%

78%

11%8%

81%

Disagree Neither Agree

Fig. 3.3 PRIMARY REASON FOR LAST EATING OUT OCCASION Percent of Respondents


DiningOut withFriends

21%Treat/

CelebrationDiningOut withFamily

DiningOut withPartner

Meal withShopping

MealwithLeisure

QuickMeal-on-the-Move

RoutineMeal

BreakfromWork

21% 20% 12% 7% 6% 4% 4%Boardroommeeting

Other

3% 1% 1%


In the last 12 months,35% of consumers havereduced the extent towhich they are eatingout. 55% are eating outthe same as they were 12months ago and 10% areeating out more.

Consumers are also re-consideringtheir choice of outlet, with 32% ofpeople visiting places charging 10-15 per head less over the last yearand 41% of people reducing theirvisits to establishments chargingmore than 15 per head.

When individuals are eating out:

Lunch is the meal occasion eaten out of the home most often 42% ofpeople eat lunch out of the home at least once a week. Comparatively,31% eat dinner out of the home once a week and 8% breakfast. Thegreatest percentage of people 79% seldom or never eat breakfast outof the home.

Eating Out Behaviour

Fig. 3.4 CHANGES IN EATING HABITSIN THE LAST 12 MONTHSConcerning your generaleating habits over the lastyear, do you eat out of homemore or less?(Percent of Respondents)


Eat out of home

10%

55%

35%

Less Same More

Never Less than once a month One meal per month

One meal per fortnight At least one meal per week

Fig. 3.5 FREQUENCY OF MEAL OCCASIONS OUT OF HOMEHow often do you eat out? Percent of Respondents


Breakfast Lunch

8%

7%3%3%

79%

42%

12%

16%

17%

13%

Dinner/EveningMeal

Late Night/Supper

31%

8%

18%

22%

21%

78%

7%5%3%6%

Lunch is consumed out of thehome by 24% of UK adults at leasttwice a week this figure would beconsiderably higher if packedlunches were accounted for. Thisproportion compares with 13% ofeating dinner out twice a week ormore.

On average, 1 in 9 meals are eatenout of the home every week.However, this encompasses a hugeamount of variation. Some peopleare eating out of the home on afairly irregular basis for example,16% eat lunch out less than once amonth. Others will eat five or moremeals a week out of the home. Anestimated 10 million people in theUK, or 16%, eat five or more mealsout of the home every week.

Lunch dominates, largely because asizeable number of workers are outof the home during their lunchhour every day. Not all of theseworkers will be buying lunch everyday, however 57% typically bringin a packed lunch at least one day aweek, equating to approximately 17million people. The workplacecanteen is the second mostpopular choice with 24% of peopleeating their lunch there.

The most popular evenings foreating dinner out of the home areFriday and Saturday nights. Fridaynight is more popular with youngerage groups and Saturday night amore favoured evening for theearly thirties to middle aged (seeCase Study 2).


Fig. 3.6 LUNCH VS. DINNER COMPARISON OF OUT OF HOMECONSUMPTION BY MORE FREQUENT PARTICIPANTSHow often would you eat out? Percent of Respondents




5+ Meals per week 2-4 Meals per week One meal per week One meal once per fortnight

9% 15% 18% 18% 13% 21%12%1%

Lunch

Dinner

Table 3.1 FREQUENCY OF UK CONSUMERS EATING OUT OF HOME BY MEAL OCCASION

AVERAGE NUMBER OF MEALS EATEN OUTPER MONTHRANK MEAL OCCASION

LUNCH

DINNER

BREAKFAST

LATE NIGHT SUPPER

4.9

2.8

0.9

0.6

1

2

3

4

Table 3.2 TOP 10 LUNCH CHOICES AMONGST THE UK WORKING POPULATIONPercent of Respondents

PERCENTAGERANK WORKING LUNCH

BRING IN PACKED LUNCH

EAT IN CANTEEN/CAF

GO TO CAF/SANDWICH BAR

WORK AT HOME

BUY FROM SHOP/SUPERMARKET

GO TO RESTAURANT

GO TO A FAST FOOD OUTLET

1 DONT NORMALLY HAVE LUNCH AT WORK

I GO HOME FOR LUNCH

I GO TO THE PUB

57.4%

23.5%

18.9%

11.9%

7.8%

4.4%

4.4%

4.0%

2.7%

2.4%

1

2

3

4

5

=6

=6

8

9

10

Where individuals are eating out:

The most frequently visited establishments, i.e. customers visiting at least once a week, comprise: coffee shops/cafs/sandwich bars (34% of consumers); the workplace (17%); general restaurants (16%) and fastfood outlets (15%).


Table 3.2 TOP 10 LUNCH CHOICES AMONGST THE UK WORKING POPULATIONPercent of Respondents

Fig. 3.7 FREQUENCY OF EATING OUTHOW OFTEN DO YOU EAT OUT IN THE FOLLOWING ESTABLISHMENTS? Percent of Respondents


Generalrestaurants

Pub restaurants Coffeeshops/cafs/sandwich bars

Fast food outlets Departmentstore/

supermarketcafs

Workplace/college caf/canteen

Facilities infitness and

leisure centres

16%

19%

22%

26%

17%

14%

22%

23%

26%

16%

34%

13%

17%

11%

25%

15%

11%

15%

12%

47%

14%

8%

15%

14%

50%

17%

1%2%1%

79%

6%1%2%2%

89%

Seldom or never Once every 2-3 months Once per month Once per fortnight At least once per week

Table 3.3 supports what isexpressed in Figure 3.7 byrepresenting how frequently theaverage adult will visit certainestablishments for example,people will visit a coffeeshop/sandwich bar, on average,twice a month and will visit a fastfood chain on average once amonth. By contrast, a caf in adepartment store or supermarketis typically visited only once amonth.

Table. 3.3 FREQUENCY OF ESTABLISHMENT VISITS PER WEEK

AV. FREQUENCY OF VISITS PER MONTHRANK ESTABLISHMENT TYPE

COFFEE SHOP/CAFS/SANDWICH BARS

GENERAL RESTAURANTS (BRANDED AND INDEPENDENT)

PUB RESTAURANTS

FAST FOOD OUTLETS

WORKPLACE/COLLEGE CAF/CANTEEN

DEPARTMENT STORE/SUPERMARKET CAF

FACILITIES IN FITNESS & LEISURE CENTRES

2.0

1.4

1.3

1.1

1.1

1.0

0.3

1

2

3

=4

=4

5

6

8Source: Allegra Strategies Analysis, Consumer Research, 2009


Consumers vary significantly in the frequency oftheir out of home eating patterns from the veryregular diners to those eating out more rarely.Table 3.4 categorises and describes some of thekey characteristics of different usage segments.

Eating Out Consumer Typologies

Table 3.4 CONSUMER TYPOLOGIES BY EATING OUT FREQUENCY

5 MEALS ORMORE PER WEEK

(16%)

GENDER

AFFLUENCE

EATING OUTCHANGES IN THELAST 12 MONTHS

EATING OUTCHANGES IN THENEXT 12 MONTHS

EATING OUT IS ATREAT

POPULARESTABLISHMENTS

COMMONREASONS FORDINING OUT

DINING OUTCOMPANION(S)

REASONS FORVISITING CERTAINESTABLISHMENTS

Male, 18-24

Above averageaffluence

Eat out more

Eat out more

65% agree

Visits all mainestablishment types

Break from work,everyday meal, quickmeal on the move,dining with friends

Self, friends

Been there before,food quality/taste,attentive service


2-5 MEALS PER WEEK

(22%)

Female, 25-34

Average affluence

Eat out more

Eat out less

75% agree

Coffee shops, cafs,supermarket cafs,fast food outlets,general restaurants(mainlyindependents)

Break from work,routine meal

Self, friends

Food quality/taste,wide variety of foodoptions, good valueon food and drink,good review innewspaper

1-2 MEALS PER WEEK

(23%)

Female, 35-44

Average affluence

Eat out less

Eat out less

84% agree

General restaurants,local pubs

Dining with partner,dining with friends

Partner, family

Convenient location,food quality/taste,pleasantenvironment, cleanrestaurant, quickservice

ONCE A WEEK -ONCE A

FORTNIGHT (20%)

Female, 55-64

Average affluence

Eat out less

Eat out less

88% agree

Coffee shops, localpubs, generalrestaurants(independentsmainly)

Special occasion,dining with family,dining with friends

Partner, family

Been there before,organic/Fairtradefood, locally sourcedfood, wide variety offood options,pleasantenvironment

ONCE AFORTNIGHT ORLESS (19%)

Female, 65+

Below averageaffluence

Eat out less

Eat out less

90% agree

General restaurants(brands mainly), pubrestaurants

Special occasion,dining with family

Family

Good value on foodand drink, healthyfood options, familyfriendly, quickservice,recommended byfriend/family, specialoffers


Coffee shops, cafs andsandwich bars dominatein terms of the frequencycustomers visit them.General restaurants andpubs are also popularchoices with individuals.

When respondents were askedwhich establishments they havevisited in the last three months, thelocal pub and the independentrestaurants came out top with thegreatest share. 52% of respondentshave visited their local pub, 44% anindependent restaurant, and 32%an independent caf.

The strong visiting numbers forpubs can be attributed to the sheernumber of pub outlets. Allegrasresearch has indicated that the pubhas sentiment with both youngadults (18-24), and the oldergeneration (65 and over). The pubis popular at different times of theday for these age groups, with theyoung adults preferring to visitpubs in the evening and olderadults during the day. Pubs havesuffered in recent years with anumber of outlets closing. However, they are clearlysomewhere which can successfullyattract all age groups and allclasses together and close thebridge between them. The choiceand quality of food in pubs hasbeen rising for several years andthe Smoking Ban introduced in2007 further fuelled the need forpubs to serve food. As a result, thepub has become a competitor tomany independent restaurants.

The Popularity ofEstablishments

Table. 3.5 POPULARITY OF ESTABLISHMENTSWhich eating out establishments have you visited in the last 3 months?Percent of Respondents

PERCENTAGERANK NAME OF ESTABLISHMENT

LOCAL PUB

OTHER INDEPENDENT RESTAURANTS

INDEPENDENT CAF

MCDONALDS

INDEPENDENT CHINESE RESTAURANT

INDEPENDENT INDIAN RESTAURANT

INDEPENDENT ITALIAN RESTAURANT

COSTA COFFEE

STARBUCKS

KFC

MARKS AND SPENCER (INCL.CAF)

PIZZA HUT

BURGER KING

SUBWAY

CAFF NERO

52%

44%

32%

30%

28%

26%

18%

18%

15%

13%

9%

8%

8%

8%

8%

1

2

3

4

5

6

=7

=7

9

10

11

=12

=12

=12

=12


Of the foodservice brands,McDonalds emerges as the mostpopular establishment with 30% ofpeople having visited one in thelast three months. Costa Coffeeand Starbucks come second andthird in the ranking of the mostpopular branded chains visited byUK adults.

We generally like tovisit the pub, have ameal and meetfriends everyweek. Male4455--4499,, LLeeiicceesstteerr


Quality and taste of food,above price, is the keydeterminant in the valueequation it is cited asthe leading reason forchoosing a place to eatout.

Cleanliness is considered to benearly as fundamental as foodquality with 71% of peoplereporting it as an important aspectto consider when choosingsomewhere to eat out.

Whilst good value for food anddrinks came out as highlyimportant amongst manyindividuals (38%),cheap/inexpensive food did notrank highly as a key factor indetermining where to eat out. This indicates that whileconsumers expect value for money something which has become ahuge priority since the economicdownturn they are not looking forcheap food. Many would associatecheap food with poor quality.

Key Influences

The highest spend by individuals on their last eatingout occasion was for a business meeting, with anaverage of 26.31 spent on a meal per person, thoughthis level of spend falls outside the scope of theInformal Eating Out market.

Following a business meeting, dining out with a partner also had a highaverage price tag, with spend per person of 15.80. By contrast, quickmeals on-the-move had the lowest associated spend, at 5.43.

Spend Patternsaround Eating Out

Table. 3.6 IMPORTANT ASPECTS WHEN CHOOSING SOMEWHERE TO EAT OUTWhich of the following are important when choosing a place to eat out?Percent of Respondents

PERCENTAGERANK IMPORTANT ASPECT

FOOD QUALITY/TASTE

FOOD SAFETY/CLEANLINESS

NICE ENVIRON./PLEASANT ATMOSPHERE

GOOD VALUE FOR FOOD & DRINKS

ATTENTIVE SERVICE

BEEN THERE BEFORE/PREV. EXPERIENCE

FAMILY FRIENDLY

CONVENIENT LOCATION

WIDE VARIETY OF FOOD OPTIONS

HEALTHY FOOD OPTIONS

RECOMMENDATIONS BY FRIENDS/RELATIVES

QUICK SERVICE

FOOD SOURCED LOCALLY

CHEAP/INEXPENSIVE PRICES

PROMOTION/SPECIAL OFFER/DISCOUNT

73%

71%

41%

38%

30%

23%

21%

20%

19%

18%

18%

14%

11%

11%

9%

1

2

3

4

5

6

7

8

9

=10

=10

12

=13

=13

15



The largest proportion ofpeople consider eatingout to be less affordablethan eating at home.

However, this point of view is byno means unanimous. 30% ofrespondents believe that eatingout is now more affordablecompared with eating at homethan it has been in recent yearsand 30% believe there has been no change.

When respondents are dividedbetween those who have beenaffected by the credit crunch andthose who have not, there is adisparity in views. Unsurprisingly,48% of people who have beenaffected by the credit crunch findeating out less affordable thaneating at home while 35% ofpeople who have not beenaffected by the credit crunch holdthe same view.

The Affordability of Eating Out

Fig. 3.8 AVERAGE SPEND BY TYPE OF OCCASION


Busi

eating out in the uk, 2009

Documents