Restaurant openings top 1,700 in shift to eating-out
Despite the continuing closure of pubs across Britain, the eating and drinking out market saw a net 1,770 new restaurants open in the last 12 months, according to latest data compiled for the new Market Growth Monitor from AlixPartners and CGA Peach.
The contrast between the 6.9% growth in restaurant sites and the 4.4% decline in drink-led pubs and bars – including a 5.1% fall in community pub numbers – in the year to the end of June reflects the continuing shift in consumer preferences towards eating-out occasions.
The first quarterly Monitor figures show that there was growth too in numbers of wine bars, café bars and food-led pubs – the latter increasing by 1.1% over the last 12 months. Branded food pubs saw a 9% growth in numbers – and the bulk of the overall growth in restaurants came from the, largely branded, chain restaurant market.
There are now more restaurants with licences in GB than drink-led ‘community locals’ – 27,500 against 26,700.
The number of pubs and bars overall fell by 2.6% over the year to just above 53,000.
Return to market growth
“But the good news is that the long-term decline in the total number of licensed premises in Britain – including hotels, clubs, restaurants and other venues selling alcohol on the premises – appears to have bottomed out,” said Peter Martin, Vice President of CGA Peach, the business insight consultancy that produces the Monitor in partnership with AlixPartners.
“Over the last year, total numbers actually increased slightly by a net 965 to just over 124,000, driven largely by the expansion in restaurants. In the previous five years, numbers had fallen by over 8,000,” Martin said.
Urban growth
Urban areas are the main focus for the new growth, seeing a 2.9% uplift in licensed premises in the year to June, with food-led sites, including restaurants and pubs, increasing 5.9%, while the numbers of drink-led businesses remained largely static.
‘Move to food’: more licensed restaurants than drink-led community pubs
However, not everything is gloomy in suburbia or rural parts, added Martin. Total numbers of licensed premises were largely unchanged year-on-year, with growth in food-driven sites offsetting declines in traditional pubs and bars. The suburbs, in particular, saw a marked ‘move to food’, with a 5.2% increase in those types of operations – not far behind the growth rate in urban centres.
“In an active deal market with many groups looking to expand, this is an important and timely barometer. The figures from our first Market Growth Monitor illustrate that restaurant growth is genuinely a UK-wide story, with growth in many parts of the UK outstripping that of London,” said Paul Hemming, Managing Director, AlixPartners,the global financial advisory firm.
“The reality of today’s eating-out market is that, beyond the M25, there are more expansion opportunities for the leading branded operators, as shown by the presence of cities such as Leicester, York and Sheffield in the top 10 growth towns.
“The proliferation of branded eating-out concepts to relatively new destinations, and its obvious implications for the independent operator cohort, is a picture that chimes with what we hear in the marketplace anecdotally, through the businesses with which we work. It is clear that the desire for quality food and bar offerings has spread across the country. Many of our clients are taking advantage of this new market and are finding the combination of strong demand and (typically) lower rent is delivering highly attractive ROI.
“The reality of the move to food is borne out in the CGA Peach data which shows that today in Britain, for the first time, the number of licensed restaurants outstrips the number of drink-led community pubs – a switch that occurred earlier in 2015. How times have changed.”
Not just about London
Regionally, Greater London remains the growth engine. Total numbers grew 3.3%, with food-led businesses up 6.9% over the past 12 months – representing a net increase of almost 500 new licensed businesses.
The North West and Wales were the regions to see overall declines, but then only marginally, both down 0.1% on the year before. Again, the expansion of eating-out venues offset the decline in alcohol-led sites – and all regions saw a drop in drinking establishments.
City centres, however, are the real hot-bed of competition – where the premiumisation of the drinks market has also led to a net increase in bars and other drink-led operations opening up, in contrast with what has been happening elsewhere in the country.
While central London saw most new openings last year in number terms – up by over 100 – other cities are overtaking it in terms of rate of growth for both restaurants and bars.
While central London saw a 3.3% increase in licences – and Manchester, a current major focus for brand openings, a 3.7% jump – others like Glasgow, Newcastle, Leeds, Cardiff, Bristol and Birmingham are outstripping both with growth rates of around 5% or above (see tables left). In the last 12 months, Birmingham even saw a 5.5% increase in bars and other drink-led operations in its centre.
City centres in growth: top 10
(increase in on-licensed premises in 12 months to June, 2015)
Position
Net new sites
Annual change
5 year change
1.
Leicester
18
8.5%
13.2%
2.
Bristol
10
6.5%
2.5%
3.
Birmingham
20
5.9%
11.8%
4.
Leeds
18
5.8%
18.8%
5.
Glasgow
25
5.2%
8.9%
6.
Newcastle Upon Tyne
18
4.9%
15.9%
7.
Cardiff
10
4.9%
25.0%
8.
York
11
4.4%
17.5%
9.
Liverpool
15
4.3%
17.7%
10.
Sheffield
9
4.2%
1.8%
About the AlixPartners CGA Peach Market Growth Monitor
The new quarterly Monitor provides a snapshot of pub, bar and restaurant supply in Great Britain. All data is drawn from CGA’s Outlet Index, a comprehensive, continually up-dated database of all licensed premises. The Monitor is delivered in partnership with AlixPartners, the leading global financial advisory firm.
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