News & insight

An oversupply of casual dining outlets?

Marketing / 13 Apr, 19

Published on: 5th July 2018

The UK casual dining market is undergoing a real period of transformation with operators facing difficult times due to cost pressures and consumers spending less and less on eating out. Mark Convery, retail agent in our Newcastle team commented on current trends in the casual dining sector and what impact it’s having in the North East, in particular on Newcastle’s burger restaurants.

Recent surveys have shown that a quarter of consumers will spend less on eating and drinking out in 2018, which will only apply further pressure on the heavily congested casual dining sector.

The transformation of Newcastle’s food and drink market has been gaining pace for some time, but perhaps the most notable change in recent years has been the number of casual dining venues that have opened in the city centre. At Eldon Square and Newgate Street in particular we have seen Tapas Revolution, Red’s True Barbecue, The Alchemist and Turtle Bay all open within the recent past.

Whilst on the face of it, this is brilliant news for the consumer there has also been a negative effect on the independent operator as chain operators move in and increase the competition for the pound in the public’s pocket. Some would argue that these chain brands are no competition for the quality and uniqueness of the independent operators, but it must be remembered there is only a finite market for outlets such as these.

Burger Wars

In particular, over the past couple of years, the North East’s insatiable appetite for gourmet burger chains has grown significantly with Byron, Five Guys and Smashburger all opening within walking distance of each other.

The growth of the popularity of such burger chains is a reflection of a change in consumer perceptions. It largely echoes consumers desire for high quality, fresh food in a more informal setting, whilst satisfying the ongoing demand for fast service – sounds easy right?

Both nationally and locally we have seen a number of burger chains experiencing trading difficulties. Most notably Handmade Burger Company was placed into administration last year and ceased trading and Byron Burger entered a rescue deal that could see up to a third of their UK stores closing their doors (including their MetroCentre outlet). The burger operators are not the only ones experiencing the pressures and there are already a number of units that have opened relatively recently being marketed for assignment, the failure of Handmade Burger Co and the restructuring of Byron however shows a clear example of the pressures and with the recent announcement that Jamie’s Italian are looking at a restructure, it does make us wonder whether there will be more casualties in the casual dining sector over the next few months?

Topics: Uncategorised

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