Fast food moves upmarket

28 January 2005 by
Fast food moves upmarket

The number of gourmet burger bars has exploded in recent years and, while still primarily a London phenomenon, the model is set to become a mainstay of the UK fast-casual dining market.

While burgers have become a staple on the menus of gastropubs, a clearer sign of the development of the market is the recent interest shown by two aggressively expanding restaurant groups.

Back in October, Urban Dining spent £30m acquiring the 23-strong Tootsies chain and announced plans to grow the brand to 100 sites. Then, last week, Clapham House Group bought the six-strong Gourmet Burger Kitchen chain for £10m and revealed plans to open a further 20 sites within the M25 in the next two years.

Other gourmet burger companies looking to expand include Hamburger Union, which has two London sites, and the Fine Burger Company, which recently took a second site in the capital. The operators of Real Burger World also aim to expand from their single-site restaurant in London's Clapham.

By pitching their offerings at the fast-casual market and focusing on fresh, healthier ingredients, operators such as Gourmet Burger Kitchen and Fine Burger Company have managed to differentiate themselves from the fast food giants and benefit from the rising popularity of the UK casual dining market.

As analyst firm Mintel noted in its survey of the UK burger market released last month, fast-food players such as McDonald's and Burger King have suffered from a multitude of factors in recent years.

Not only was the sector hit by the BSE and foot-and-mouth epidemics, it has suffered from heightened consumer awareness over health issues and concerns over the way the food is sourced, prepared and presented. Product quality has also been an issue, said Mintel, with all-meat burgers along with more international-flavoured recipes becoming a stronger feature.

It has taken some clever marketing and a shift in mindset among consumers to transform what was essentially a low-cost food item to a main meal with a premium price tag. However, customers are increasingly happy to spend £7-£8 on a burger made with premium-quality ingredients, and most operators claim an average spend of £10-£12 a head.

Both Tootsies and Gourmet Burger Kitchen stress their use of handmade, chargrilled burgers served in a bun made of "proper" bread, accompanied by chips made from fresh potatoes, to heighten customers' perception of value for money.

Not that beef is a given in the gourmet burger world. Gourmet burger outlets typically offer a range of other offerings, such as chicken and chorizo sausage, alongside other hearty fare like steak sandwiches, and use a wide range of seasonings.

They have also actively courted the vegetarian pound, with a number of offerings based on ingredients such as haloumi cheese and field mushrooms.

While the percentage of vegetarians in the UK has been static for a number of years, Mintel notes that the non-meat market is still growing, driven by consumers looking to reduce meat intake and vary their diet.

Another obvious difference from fast-food outlets is that, as with other fast-casual offerings such as La Tasca, Nando's and Outback Steakhouse, they tend to be licensed.

There are also similarities to the fast-food model, however. Hamburger Union has counter service like a fast-food restaurant and does take-away. Meanwhile, operators like Real Burger World are similar to traditional fast-food restaurants in price (average spend of £4.50) but with a focus on quality products, with chargrilled burgers made from fresh mince.

While there may not seem much to differentiate between the early movers in the market, the recent addition of Babes'n'Burgers on London's Portobello Road, with its organic ingredients and children's play area, could be a sign of more innovation to come.

The bottom line is that consumers are growing increasingly disillusioned with traditional processed beef hamburgers, and this can only be good news for the gourmet operators.

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