LONDON – Casual dining outlets and coffee shops are likely to be the main winners in the foodservice sector during 2014 as consumers slowly start to regain confidence and increase their spending on eating out. Foodservice specialist Horizons predicts that the market will start to see some real growth during 2014, although it will be slow in coming and restricted to particular sectors of the business.
“We predicted that UK foodservice would remain fairly flat during 2013, and so it was. However, towards the end of last year forward bookings started to look more encouraging.
Feedback indicated that corporate bookings for Christmas were up compared with the previous year, and the economy started to feel as if it had reached something of a turning point,” commented Horizons’ managing director Peter Backman.
“It is too early to be certain of continued improvement as consumer’s are still unsure about their personal finances. The post-Christmas period, Q1, is never good for the UK’s foodservice sector as people struggle to pay for the cost of Christmas.
Bad weather during January and February also stops people going out to eat. But as we move into Spring 2014 we would expect operators to see some like-for-like improvement in sales.”
Horizons believes that the first sectors of the foodservice market to see improvements will be in casual dining – where eating out costs from £10 to £20 per head – and in the takeaway and drink-in coffee sector.
“Casual dining has really been the success story of the past few years,” said Backman. “Consumers have traded down from more formal dining to establishments with more flexible menus, extended opening hours and value-for-money food.
With competition strong in this sector operators, including high street brands and pub operators, have concentrated on improving their service, offering more innovative dishes and remaining price competitive.
This has kept customers dining out and as the market picks up even further these establishments will benefit from the loyal customer base they have built throughout the downturn.”
Backman believes the UK’s coffee outlets will continue to see sales growth as consumers seek a relatively cheap and easy way to treat themselves. However, the big coffee chains are likely to look more seriously at their food offer to achieve better returns from their premises.
“The UK’s coffee market is rapidly approaching saturation point. There’s a limit to the number of new stores and new delivery concepts that can open as almost every high street in the country seems to boast a Costa, Starbuck or Caffè Nero.
The coffee chains will be forced to re-examine and improve their food offer even further, and perhaps even their coffee offer, as the artisan specialists and patisseries start to make more inroads in the market.
Alternatively, we could see something of a price war as the big three start to compete head-on by offering increasingly cheaper cups of coffee.
“The year ahead will be an interesting one for the foodservice sector,” added Backman. “Some recovery in sales is likely, but consumers are now constantly seeking value-for-money, good quality food and high service levels.
This means that those operators who don’t match up will be abandoned in favour of outlets that do.
We are now dealing with a much tougher, more discerning customer,” he concluded.
Source: Horizons FS Limited
