Blog: It's official: recession eats into restaurant sector
Dean Best | 15 July 2009
Those UK food manufacturers focused on the retail channel - here's something, which though you may long have suspected, will nonetheless brighten your day: the amount of money spent in restaurants has fallen. It's official.
Or, so at least figures out today (15 July) from industry analysts Allegra Strategies claim. In Allegra's report - Eating Out in the UK, 2009 - it is claimed that the amount we spend eating out of the home has dropped for the first time in 40 years.
"The value of eating out is expected to be GBP40.3bn (US$66.3bn) in 2009 – a fall of 0.5% from last year. This is the first time there has been a decline since the ‘informal eating out market’ emerged in the 1960s," Allegra says.
Suppliers to UK retailers have long claimed that a decline in eating out would help them withstand the worst of any slump in consumer spending. Back in January 2008, Bernard Hoggarth, chief executive of UK group Cranswick's food division, predicted as much - and believed the sausage maker would benefit.
"When the nip and tuck comes, there'll be less bums on seats in restaurants generally speaking but the quality of food will continue to be purchased for home consumption. And that's where we are," Hoggarth told us, months before the recession hit.
However, all is not lost for the restaurant sector. There have been some notable success stories in recent months, despite the recession.
Earlier today, pub group JD Wetherspoon, which has invested heavily in its food offering, said its annual profits would come in ahead of forecast.
Moreover, Allegra says growth will return to the sector next year and predicts sales will reach GBP47.5bn by 2014. The analysts point to rising affluence, "more youthful" older consumers and a boost from the London Olympics in 2012.
And, Allegra argues, there are some emerging consumer trends that could help some in the restaurant sector stay ahead of the pack - notably in healthy eating and local sourcing.
“The industry will have to become more consumer-focused as customers won’t forget what they are learning in the recession," Allegra project director Steve Gotham argues.
"Eating out may have become an everyday experience, but when the economy picks up, people won’t go back to paying over the odds for a meal.”
Danone completed its US$12.5bn acquisition of WhiteWave Foods this week. The move will roughly double Danone's presence in North America, where WhiteWave is a top four dairy player. ...
Premier Foods plc revealed today (28 March) it has secured a deal with its pension scheme trustees that will see the UK food maker reduce its pension burden....
Hain Celestial, under the scrutiny of the investment community in recent months and facing some challenges in its domestic market, has announced another shuffling of its management pack....
FrieslandCampina, which today served up higher profits but lower sales for 2016, is ready to offload the last non-dairy business owned by the Dutch cooperative giant....
- Danone's Q1: four things to learn
- Nestle Q1 update: four things to learn
- Column: Why snacking is the new meal
- Who will buy Danone's Stonyfield business?
- Interview: KP Snacks on growth strategy
- Tyson shops Sara Lee bakery, Kettle and Van's
- Nestle to cut UK confectionery jobs
- Tyson to buy burger-to-entree firm AdvancePierre
- PepsiCo affirms full-year target as Q1 hits mark
- TreeHouse Foods sells soup, baby food units