Restaurants set to recover to near pre-pandemic levels
15/03/2022
After a calamitous couple of years, hospitality in the UK is back on the growth track, according to a recent industry report.
The findings of the Lumina Intelligence UK Restaurant Market Report 2021/22, show the UK restaurant market is set to recover to 94 per cent of its 2019 value in 2022.
So while caviar, vodka and all things Russian may be off the menu while the war rages in Ukraine following the invasion, restaurants look set to continuing to grow their businesses, with the top 10 branded restaurants predicted to surge ahead of the 2019 figures.
This is despite the ongoing staff shortage challenge, rising costs and VAT returning to 20 per cent for the sector.
As COVID-19 restrictions lifted, the report indicates that the UK restaurant market grew by 25.9 per cent or up £2.3 billion in 2021 to a total value of £11.2 billion.
Coronavirus restrictions in the first half of the year impeded recovery in the first six months of the year and outlet decline continued in the market in 2021, at a rate of minus 2.8 per cent, seeing a net loss of 817 sites.
In 2022, the report predicts year-on-year growth of 59.4 per cent or £6.6 billion to a value of £17.8bn. Outlet decline in the market is expected to ease to -2.1 per cent in 2022, impacted by continued decline in the independent segment.
In contrast to the entire restaurant market, the top 10 branded restaurants by turnover are expected achieve sales of £3 billion in 2022, exceeding 2019 turnover. Leading branded restaurants are also forecast to add a net 56 sites in 2022, a 1.5 per cent increase.
Restaurant penetration was 69 per cent higher in December 2021 than in December 2020, peaking in September with one in 10 consumers dining out once a week. But that figure fell towards the end of 2021 with the spread of Omicron.
Meanwhile restaurants are adapting by customising to maintain consumer choice, whilst maintaining reduced menu sizes.
- Chain restaurant menus had an average of 64 dishes in 2021, a decline of 20 per cent compared to 2019.
- Operators are retaining simplified and reduced menus to mitigate challenges around staff shortages and supply chain disruption.
- The greater customisation has allowed operators to continue to offer personalisation and wide choice, despite running reduced menus.
Blonnie Whist, Insight Director at Lumina Intelligence said, “Unrestricted trading throughout 2022 is forecast to underpin recovery in turnover across the market. Falling case numbers will boost virus conscious consumer confidence in socialising out of home.
“However, despite most wanting to move on from pandemic, it is the pandemic-led trends that will continue to provide the biggest growth opportunities. Demand for delivery shows no sign of waning, menus are set to remain streamlined to manage rising costs, digital ordering and payment solutions will increase speed and satisfactions and outdoor dining will be a key development opportunity.”