Ian King, Deputy Business Editor
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It has been one of Britain’s most successful industries for the past four decades, but the recession has finally brought the phenomenal growth in informal dining to a halt.
A report published yesterday by Allegra Strategies, the analysts, revealed that the amount Britons spend on informal eating out — where a meal costs £15 or less — has fallen for the first time in 40 years.
The research, Eating Out in the UK 2009, reveals that 15,000 jobs have been lost in the sector in the past year and warns that the trend could continue as one in five people plan to eat out less during the next 12 months.
It says that only one in nine meals will be consumed outside the home this year, as opposed to one in eight last year, with a third of Britons spending more time and money on cooking at home. The report says this trend has been driven by a huge array of offers from supermarkets, such as the “Feed your family for a fiver” promotion by Sainsbury’s and the “Dine in for £10” offer from Marks & Spencer.
The report reveals that while people are eating-out less across the board, from sacrificing a morning coffee to visiting restaurants less frequently, establishments that charge more than £10 a head have been hardest-hit.
Allegra highlights casual dining — where customers sit down to an informal meal — as being badly affected, along with the “ethnic” category, typically Chinese, Indian and kebab establishments. It says: “Both operate at relatively high transaction values.”
The report — based on interviews with 148 restaurant executives and operators and 2,000 consumers, and sponsored by McDonald’s — suggests that the informal eating-out market in the UK will have contracted by 0.5 per cent this year to £40.3 billion.
Steve Gotham, project director at Allegra Strategies, said: “This report shows that, while some companies continue to do well, many are suffering.The industry will have to become more consumer-focused as customers won’t forget what they are learning in the recession. Eating out may have become an everyday experience, but when the economy picks up, people won’t go back to paying over the odds for a meal.”
The report predicts that the sector will return to growth within 12 to 18 months, once consumer confidence returns. It forecasts that the market will receive a major boost from the 2012 Olympics and will be worth about £47.5 billion annually by 2014.
Mark Brumby, leisure analyst for Astaire Securities, the broker, said: “This is a downward move in an upward trend. I think that the industry will be bigger in ten years’ time than it is now. Whether it will be bigger than it is now in two to three years is more debatable.”
Mr Brumby cited last week’s results statement from Clapham House, which owns the Gourmet Burger Kitchen and Real Greek restaurant chains, as a good indicator of what was happening in the sector. “David Page, the chairman, was pointing out how promotional activity was on the increase — vouchers, two-for-one deals and so on — and how that was hitting margins. People are cutting the price of what they pay and in those circumstances, one would expect to see the smaller, independent operators, going to the wall.”
Steve Easterbrook, chief executive of McDonald’s UK, said: “Whilst the market is in decline, the sector is not falling as fast as other industries and there are some brands doing well.”
However, with trading conditions likely to remain tough for some time, fears remain for many independent operators.
Douglas Roxburgh, president of the National Federation of Fish Friers, said: “Instead of buying cod and chips, for example, [people] are perhaps buying sausage and chips, which is half the price, or just chips and gravy. The average spend is definitely down.
“It concerns us greatly. At the moment, there are around 11,000 fish-and-chip shops, but I would expect a number to close during the next year.”
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