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Chain restaurants push ahead with expansion plans

22 October 2008 by
Chain restaurants push ahead with expansion plans

The major players in the UK casual dining market still have large expansion plans for 2009 despite the economic downturn, research has found.

A survey on the leisure sector, by property agent Savills, shows that The Restaurant Group (TRG), Nando's, Tragus and pub company JD Wetherspoon have plans to open between 20 and 30 new outlets each next year.

Pizza Express, Ask and Zizzi owner Gondola Holdings has already signed up 40 new locations for 2009 and is looking for at least another 10 sites.

Andrew McGregor, head of leisure at Savills, told Caterersearch the majority of restaurant openings would be in retail environments, either in new developments on the high street or in shopping centres.

"Operators are able to take advantage of longer trading hours in these environments and are prepared to pay premium values on such sites," he said.

However, Graham Turner, chief executive of Café Rouge, Bella Italia and Strada owner Tragus, said that while the company had plans to open new sites in retail developments such as Liverpool One, not all brands worked in such environments.

"Retail developments do offer a great environment for certain restaurant brands but I wouldn't go as far as saying that there will be a definite trend towards this," he said.

McGregor added that there would "undoubtedly" be many restaurant closures over the coming months. "It is very likely that there will be consolidation in the sector as smaller brands at the upper end of the market will come under pressure.

"The bigger players will be in a much better position than smaller operators as they will have a lot more buying power."

Earlier this year, research from OC&C Strategy Consultants predicted that the UK casual dining market would be worth £4.7b by 2011, compared with £3.8b in 2007.

The report suggested that, as the nation's appetite for a quick, cheap and consistent dining experience grows, branded chains would be the main driver behind the rapid growth of the market.

Experts predict rapid growth in casual dining >>

Eating out hits highest level since June 2007 >>

Consumers to cut back on eating out during credit crunch >>

Restaurant news round-up >>

Smollensky's forced to sell flagships >>

By Kerstin Kühn

E-mail your comments to Kerstin Kühn here.

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