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2016 predictions part three: the future for restaurants

17 December 2015

In our third set of predictions for 2016, Horizons managing director Peter Backman addresses the blurring of mealtimes and the intensifying competition in the restaurant market.

Next year will be another interesting one for the restaurant sector with the ongoing development of key trends we have noted during 2015 as a result of continued changes in customer habits and demands.

Over the past few years we have seen the blurring of mealtimes and this looks set to continue. Switched on restaurant operators will carry on adapting to this by extending their opening hours, broadening their menus and developing dishes that suit the growing demand for breakfast, brunch, coffee, afternoon tea and even, perhaps, dessert sales only.

But the year will also see operators having to cope with other pressures too. With competition intense, prices are unlikely to rise, although food costs might making margins ever-tighter. The impact of the National Living Wage, which, although an informal benchmark, will also be significant as employers seek to hold onto good staff by paying the recommended hourly minimum wage for over-25s of £7.20. Competition for staff will inevitably push wages to this level across the sector.

Overcapacity in the restaurant market will also intensify competition, making it tougher for those wanting to expand to find sites. As private equity backers look to cash-in on their investments there are also likely to be further mergers and acquisitions in the sector, one way companies can expand without having to find new sites. Expansion of the big players, however, inevitably brings with it further pressure on independent operators.

Food trends are likely to continue to become ever-hotter and more exotic with much influence from South America and Brazil, inspired by the 2016 Olympic Games in Rio. As with many sporting occasions those outlets offering home delivery are likely to emerge the winners during the Games as consumers stay at home to watch the key events.

Horizons' Menu Trends research suggests that healthy grains and seeds will continue to be popular on menus, along with vegetarian dishes and the growth of ‘free-from' foods, particularly gluten-free. Already no menu is complete without a decent free-from offering.

And I look forward to the ongoing influence of street food from around the world as it continues to make its mark with foods to-go and sharing platters with strong Middle Eastern and Vietnamese influences. The turnaround in quality and innovation amongst mobile catering units and street stalls vendors means that it's these operators that are setting the trends now… and it's up to high street restaurant operators to keep up!

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