The UK’s takeaway food sector has avoided the turmoil buffeting the restaurant sector, according to research by Funding Options, the online business finance supermarket.
Kitchen houses may do well to latch onto this uptick by finding outfit projects for either pure-takeaway outlets or for those restaurants with a takeaway service.
Funding Options research shows that the turnover of the UK’s top 100 takeaways has risen 10% in just a year, up to £2.7bn from £2.46bn, based on accounts filed by 31 December 2017.
Profits at the UK’s top takeaway businesses have also increased over the same time, rising 13% to £180m from £160m. This contrasts sharply with the top 100 UK restaurant groups, whose profits fell 64% to £125m from £345m over the last year, according to data from accountants UHY Hacker Young, which also revealed that 80 of the top 100 takeaways were profitable last year, compared to just 65 of the top 100 restaurant groups.
The struggles of the UK restaurant sector are in part down to the simultaneous overexpansion of a larger number of private equity backed chains, many of which took on expensive property overheads. The oversaturation of the market has coincided with rising business rates, increased supplier and staff costs and weak consumer spending. As a result, many major chains such as Byron and Prezzo have been forced to close large numbers of branches.
Takeaways typically take smaller, non-prime, and therefore far cheaper property overheads.
Funding Options also explained that the recent boom in delivery apps has had a radically different impact on the fortunes of restaurants and takeaways. Whilst for takeaways they have increased overall sales, for restaurants they have had a much more mixed impact, as app-based sales have restricted the higher-margin alcohol sales which restaurants often depend on.
Funding Options added that the growth of takeaways has been helped by their ability to quickly respond to changing market trends, such as the increasing popularity of vegetarianism and veganism in the UK. Whilst some takeaways have added healthier options to their menus, there has also been a growing number of specifically health-focused takeaways, such as Chop’d.
Conrad Ford, CEO of Funding Options said: “Takeaways have been more resilient than more upmarket restaurant in the face of the post-Brexit vote slowdown in consumer spending. Takeaway owners have also been more cautious about taking on potentially ruinously expensive property costs.
“Takeaways have quickly adapted to changing trends in the food industry – moving quickly into higher margin healthy food. They have also been able to capitalise on the rising popularity of newer apps like Just Eat and Deliveroo.”
Funding Options said that for the success of the UK’s takeaway sector to continue, owners must have ready access to vital finance get them off the ground. Many of these takeaways begin as small operations who struggle to access bank lending that can help give them a kick start.
Ford added: “If we want to maintain a healthy takeaway sector, business owners need the funding to get going – and to succeed.”