Catering market set to record post-recession high

The UK’s eating out sector is on course to record its highest level of growth since the recession began over the next 12 months.

Figures released by analyst firm Allegra Foodservice this morning suggest the market will grow 3% in value to £82.5 billion by the end of the year.

It predicts that emerging fast food concepts, coffee shops and the further proliferation of the street food movement will be the sales growth pace-setters within the UK’s eating out sector in 2014.

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The rise will be supported by an improving economic outlook, strengthening consumer spending power and increasing physical expansion from 4.5% in 2013 to 5.5% in 2014 of branded restaurant and managed pub chains.

Three quarters of senior hospitality executives interviewed by Allegra expect to see trade improve further during 2014. However, the majority of survey respondents believe that full economic recovery will not take hold until the second half of 2015.

Executives identified intensifying competition as a core business challenge overtaking concerns around rising food costs, and that building stronger customer loyalty will be a critical success factor.

They also said they had long-term growing confidence around increasing eating out activity — despite ageing demographic trends.

The research highlighted that the pub market continues to polarise, between premium operators with valued points of difference and outmoded pubs with “non-descript” food offers.

Simon Stenning, Allegra Foodservice strategy director, said: “Eating out market value growth of 3% in 2014 will be the highest since the recession began and is clearly welcome news. This will come from a combination of increasing consumer eating out participation, an uptick in visit frequency and some average spend gains as consumers start to feel more confident about their personal finances and spending power.”

Stenning warned that the growth would be “hard fought” for in an increasingly competitive trading environment, with gains likely to be patchy across the market.

“The onus on operators will remain innovating on product, refining menu price architectures and adding greater value across the consumer experience to build stronger customer loyalty,” he said.

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