By Christina Golding
RESTAURANTS and take-aways face greater competition from retailers following recent announcements from Debenhams stores and Asda supermarkets.
Debenhams said this week that the new bistro-style restaurant on the top floor of its Leeds branch would have a separate entrance and remain open outside of store hours.
Asda, meanwhile, is spending up to £30m on 60 new restaurants, the first of which opens next month at its store in Canterbury, Kent. The outlets will offer a wide range of hot and cold foods, from Indian, Chinese and roasted chicken to fish and chips, pasta, pizza and salads, all of which can be eaten in-store or taken away.
Peter Barrett, managing director of Debenhams Food Services, said that the company had greatly increased its catering interests over the last two years. "We diversify a great deal on the food front. It's all about pushing the frontiers forward. Debenhams' catering business is extremely profitable," he said.
The 140-seat Leeds restaurant will stay open until 11.30pm when it begins trading in mid-October. It is aiming for an average spend of £20 per head.
Stuart Price, analyst at Credit Suisse First Boston, said that the increase in restaurants at retail outlets provided both threats and opportunities for caterers. In-store restaurants, often regarded in the past as a "necessary evil", with many operating at cost, were now improving in both sophistication and profitability.
Yet many were now looking to buy in outside catering expertise, he added. Littlewoods Stores has already made the move by appointing Granada Retail Catering to take over the running of its 90 in-store restaurants.