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Market snapshot: Casual dining

15 August 2005
Market snapshot: Casual dining

James Horler, chief executive of Spanish tapas bar chain La Tasca, was in bullish mood when in July 2005 he said that the UK market for casual dining was looking great and only "a pretty big downturn" would be able to affect growth.

With La Tasca reporting a 55.6% hike in full-year pre-tax profits, and the chain predicting it will expand to become 100 strong, his comments are worth sitting up and taking notice of.

However, there is little consensus about what, in UK restaurant terms, is actually meant by the casual dining sector.

Stefan Breg of consultancy Tribe argues that, when the vast majority of eating out in the UK is now pretty casual, the whole concept of a separate casual dining sector is nonsensical.

"This has come over from the US, where they have really categorised the market, most of the time just to appease the analysts," he suggests.

"People coin these terms for a year or two and then move on," agrees Peter Backman of research body Horizons Foodservice. "Unless you are going to a banquet, dining out is always going to casual," he adds.

The market

In the USA, the term "casual dining" was coined to describe restaurants one step up from the "fast casual" market.

"Fast casual" describes restaurants that fall between quick-service, counter-based outlets such as McDonald's and relaxed but table-service restaurants.

Disagreements about precise definitions aside, most observers suggest that casual dining encompasses restaurants that are relatively cheap and cheerful, are smart and pleasing on the eye, but not expensively designed.

They may also, but not necessarily, be themed. The clientele is likely mostly to be young, or at least under 45.

US casual dining chain Tony Roma, which arrived in the UK last year, defines the market as being aimed at leisure and mid-market consumers, with an average spend of £10-£15 a head, including drinks.

Main players

So, which operators in the UK can be considered to belong to the casual dining sector?

Tony Roma sees among its competitors the likes of Frankie & Benny's and TGI Friday's, with an average spend of £10-£15 a head, including drinks.

Another player is 155-strong group Tragus Holdings, owner of such chains as Café Rouge and Bella Italia.

In a market report last year, it defined the market slightly differently. Under the heading "fast casual" it classified brands such as Yo! Sushi, Nando's, Wagamama and Gourmet Burger Kitchen.

Rather than defining the next level up as casual dining, it split the segment into:

  • - All-day dining - where consumers can eat quality, healthy food in a casual setting at any time of the day, and
  • Traditional leisure dining - where the main (but not sole) focus is evening eating out, albeit in a casual setting.

Among the all-day dining brands it included Carluccio's, Café Rouge, Prezzo, the Wolsey, Browns and Bella Italia

Traditional leisure dining brands included Ask, Pizza Express, Strada, Frankie & Benny's and Tootsie's, it suggested.

Future prospects
The Tragus report argued that both all-day dining and fast casual are set be areas of fast growth in the future, partly because they are not yet dominated by any one brand.

Leisure dining and all-day dining brands would need to learn from fast-casual operators to improve speed of service while still operating in a table service environment.

All-day dining will continue to grow as people eat more meals outside the home, the report adds.

On the property front, premises that would lend themselves to a casual dining format are in demand, argues Billy Couper, associate director at agent Christie & Co.

Smaller properties, such as former coffee shops, are in particular getting a lot of interest, he adds.

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