The report notes that Covid-19 has had a polarising effect on restaurants across the UK, with the sector particularly hard hit due to the distress that already existed within the market prior to the pandemic.
Covid has exacerbated this situation, the report goes on to say, and will 'have a lasting impact' on the sector landscape.
This is reflected in Christie & Co’s restaurant price index for 2021, with average prices decreasing by 12.9%. This saw a continuation of the decline in prices since 2017, albeit with a more moderate decrease compared to 2020.
Despite this challenging backdrop, opportunities still exist for restaurateurs, with certain markets such as take-away and delivery, franchised businesses and quick serve restaurants having experienced growth in 2021.
This fluidity is also bringing about great opportunities for expanding hospitality entrepreneurs, many who are backed by 'new' money. Much of the expansion is in the fast casual dining and grab and go market, with many focussed on suburbs and regional villages to take advantage of the booming delivery and local markets.
“Prior to the pandemic the restaurant sector was already suffering the ill effects of over-expansion, particularly on the high street and Covid simply accelerated this distress," says Stephen Owens, managing director of pubs and restaurants at Christie & Co.
"We have however seen positives with delivery, takeaway and the quick service sectors benefiting from the pandemic, together with increasing activity in franchising as an operational platform.”
Looking to the year ahead, the report also outlines Christie & Co’s market predictions which are of a bumpy road ahead, with further casualties, both large and small, as landlords start to seek rents and other debt payments come into play.
Growth opportunities will come as key sites become vacant and rents fall with ever increasing incentives available, allowing operators without legacy burdens to take advantage.
Whilst out of town venues have benefited during 2021, there should be a return to major towns and cities during 2022.
Good operators will get better, with those with the ability to adapt and offer what the customer wants will fare well.
