These figures position the sector at 2.6% behind its pre-pandemic value, as restaurateurs find themselves more exposed to the impact of dampened consumer spending, staff and food and drink inflation.
Penetration has remained flat-year-on-year as operators struggle to boost volumes, causing restaurants to lose share of the total eating out market and leaving growth behind that of pubs and fast food outlets.
Enduring outlet decline is noted by Lumina as being a continued drag on restaurant market recovery, with an average of eight sites each week forecast to close this year.
These closures are being driven by independents, as branded restaurants are shown to be navigating the challenging market conditions more successfully. Indeed, this segment is predicted to achieve value growth of 9% in 2023 and open a modest, yet significant 1.1% more outlets.
Brands are adapting by driving recovery with more mergers and acquisitions activity, Lumina reports, making operational efficiencies and aligning themselves with consumer trends in products and experience.
Restaurant menu management tactics are evolving to balance consumer demands with cost control as operators navigate price increases without deterring customers.
Menu price inflation, a boost in meat-free dishes and lower-calorie additional courses are key menu strategies in 2023. Using premium ingredients, exploring ‘kitchen tourism’ to appeal to the appetite for international cuisine, and adding more ‘veggie-centric’ dishes are leading trends across menus.
As the economy continues to recover the future looks brighter for the market, with a value of £19.5bn forecast for 2026 ‒ underpinned by a continuing stronger performance from branded restaurants.
Over the next three years, interest rate reductions and average earnings outpacing inflation are expected to boost consumer spending power. However, restaurant market growth is forecast at 1.4%, sitting behind the total eating out market growth of 2.6%.
Lumina adds that market trends including digital innovation, strategic partnerships and sustainability initiatives are expected to be central to operator growth strategies over the next three years.