Customers choosing branded groups over independents, says NPD Group

Branded groups took 56 per cent of the market share for ‘Eating Out Of Home (OOH)’ by the end of September 2016, compared to 44 per cent for independent groups, new figures from the NPD Group show.

Branded groups were defined as chain restaurants or pubs (but not cafés), and independents as small, privately-owned businesses, which might run to just one site.

Branded outlets were attracting 1.2 billion extra visits than in 2008 (up to 6.28 billion in 2016 compared to 5.03 billion in 2008), the report said.

Breakfast, meal deals, and Millennials​

This is thanks in part to brands’ focus on breakfast options and meal deals, the report suggested, with over 36 per cent of traffic coming through these channels, versus just 13 per cent coming through in this way for independents.  

Similarly, branded groups were seen as understanding younger audiences better, with pub brands specifically capturing one in five (20 per cent) of visits from the 25-34 age group, versus 11 per cent for independents.  

The figures mark a reversal from the 2008 numbers, which showed brands had just 43 per cent of the market, versus 57 per cent for independents.

The average bill per person in branded restaurants had also increased by 16 per cent over the past eight years, the report showed, compared to just four per cent for independents.

The changing foodservice market​

Cyril Lavenant, NPD’s director of foodservice UK, explained that independent restaurants would find it difficult to stay competitive in such a changing market, but that pockets of success such as the street food phenomenon brought hope to the sector.

The age-old issues of increasing investment levels, and staying relevant to customers – which were traditionally easier among branded groups ‒ were highlighted as factors.

He said: “For the branded sector to have reversed its market share with independents over just eight years underlines how quickly Britain’s foodservice market is changing.

“Independents are struggling to be relevant and appealing to consumers on the British high street and clearly do not ‘speak’ well to young adults. Foodservice chains do a better job in this respect, especially with meal deals and promotions. Consumers are hungry for good value.”

Lavenant also added that bigger brands were more likely to have money to invest in new products, or expand into new and popular locations.

He said: “Remember that many of the big foodservice outlets we know today started as small independents. So there is clearly room for new players but they must offer something exciting and different or they will not succeed.”