Branded restaurants see steep decline
With the impact of the Coronavirus pandemic exacerbating existing issues in the branded restaurant space many mid-market chains that had been struggling to maintain relevance for several years closed sites last year, as more customers turned to smaller differentiated operators.
More than 20 groups and operators entered Company Voluntary Arrangements (CVAs) or insolvency proceedings in 2020, with large periods of lockdown and subsequent strict capacity restrictions to contain the Coronavirus heavily impacting the sector.
Overall the branded casual dining segment of the UK eating out market experienced a 6.8% outlet decline in 2020.
The top 10 casual dining brands, which include fast food and pub restaurants, outperformed the wider segment, seeing outlet decline of just 2.3%, with five of the top 10 experiencing outlet growth in 2020.
Branded pub restaurant saw a modest decline of 2%, while traditional fast food grew by 1.5%, with brands able to offer takeaway and delivery during lockdown.
Contemporary fast food , which is more reliant dine-in, declined by 9.2%.
Looking ahead, outlet decline is forecast to level out in 2021 as estates stabilise after the 2020 closures, with contemporary and traditional fast food forecast to see outlet growth and branded restaurant and pub/bar restaurant to see outlet decline decelerate significantly.
“With delivery and takeaway solutions still operating throughout the lockdown, it is unsurprising that there has been an increase in the number of traditional fast food outlets in the UK," says Katherine Prowse, insight manager at Lumina Intelligence.
"For branded restaurants and pub/bars, opportunities to open dine-in operations have been incredibly limited, resulting in large causalities across the sector. However, despite the current lockdown, we are predicting overall outlet volumes to remain firm in 2021, as the operators stabilise following the impact of 2020.”
Find out more about the Lumina Intelligence Operator Data Index here.
