U.K. Foodservice Sales Growth To Slow Slightly In 2016

A slight slowdown in growth of the British economy, a somewhat more cautious consumer, and the uncertainties surrounding the referendum on the United Kingdom’s continued membership in the European Union are among the “stones in the road” impacting the foodservice market in the U.K. These factors and others led London-based foodservice research firm Horizons to forecast a slight slowdown in foodservice sales growth in the U.K. this year, during the firm’s Annual Briefing, held March 22 in London. Horizons forecasts real growth will fall slightly to 1.8% this year from an estimated 2% in 2015. Nominal growth in 2015 was 2.8%, as food prices dropped throughout the year.

Most of the growth is coming from the restaurant  sectors, including casual dining, quick service and fast casual, and pub restaurants. The latter have dramatically upped their food game in recent years and are reaping the benefits.

Horizons estimates that full-service restaurants, including those in pubs, grew sales nominal 3.2% in 2015 with quick-service concepts growing 3.5%. The firm estimates chain operators saw sales increases of 4.7% nominal last year, significantly outpacing independents.

Growth is expected to slow to 2.7% nominal for full service this year and to 2.8% for quick service. Chain operators’ growth is forecast to slow to 3.7%. Hotel foodservice, the third largest segment in the U.K. market, will see growth slow from 2.5% last year to 1.9% this year. Most noncommercial segments are forecast to remain in negative territory in 2016 as the government continues to cut funding.

Among chain operators, smaller chains are growing fastest. Chains with five to 25 units posted sales growth of nearly 40% last year, while larger chains’ growth rates were significantly slower or even negative. The concepts growing fastest are a mixed bag of casual dining concepts such as Caribbean-influenced Turtle Bay, bread and dessert cafes such as Creams Café and Gail’s, “healthy” quick-service concept Tossed, and several Mexican concepts including fast-casual Tortilla Mexican Grill and Wahaca casual dining.