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Pubs and fast food to recover in 2011, full service to struggle

01 March 2011 by
Pubs and fast food to recover in 2011, full service to struggle

Pubs and quick service restaurants and cafés are set to have a much better year in 2011 but full service restaurants are still likely to struggle.

That's the verdict from market analyst NPD Crest, which has tracked the progress of the sector over 2010 and made predictions for the coming months.

As a whole, the market experienced some value growth (1.4%) in the fourth quarter of 2010, despite the harsher weather. This was mainly due to an increase in individual spend, according to NPD Crest.

The company said traffic is still the key problem for the industry, as consumers continue to trade down and out of the market. Good deals and value seem to be the key to enticing customers back again.

The quick service market, including fast food and coffee shops, performed much better than any other area, with an increase in traffic of 8% during the year.

Pubs also improved and enjoyed an increase in traffic in the last quarter, with the branded operators fuelling the recovery rather than independents, which are still struggling.

But NPD Crest said there was still "little evidence" suggesting a recovery in traditional full service restaurants, which have the highest individual spend. Traffic in this sector fell 3% annually and during the fourth quarter of 2010, the decline was closer to 5%.

Guy Fielding, director of GB Foodservice at NPD, said: "Consumers are still cautious about returning to the top end of the commercial restaurant market. Only when they become more confident about the economic recovery will the traffic for these outlets begin to return to the levels of three or four years ago. At the moment diners are seeking value - it is almost as if they expect the same deals in restaurants as they might get in supermarkets."

"As the economy remains a concern, and in particular with rising unemployment, it is difficult to see the full service channel transform itself, especially as the average spend is so much higher than in pubs and the quick service sector. Value and promotions will be at the forefront of consumers' minds through 2011 and commercial restaurants - whichever type of food they serve - will need to be mindful of this throughout the coming year."

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By Neil Gerrard

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