The UK hospitality sector faces its biggest challenge yet as 2012 brings a fourth year of retrenchment, with consumer confidence worsening andunemployment set to rise according to foodservice consultancy Horizons.
With a year of austerity in prospect, the country’s 260,000 eating out establishments, which generate around £42bn-worth of sales per year, will have to work even harder than last year to tempt people to spend their money on eating out.
Since the downturn began many eating out establishments have boosted customer levels by extending opening hours and offering new services such as breakfast, mid-morning coffee, afternoon tea – and even home delivery.
Others have provided free wi-fi for customers, revamped their interior design, invested in staff training and introduced new styles of dishes such as sharing plates, smaller portions and healthier options.
A raft of new concepts have also emerged on the high street, as small, fledgling chains fill gaps in the market and create new areas of business, many taking advantage of cheaper high street rents. A common theme amongst the new brands is good quality and healthy food-to-go with Mexican and Japanese cuisines proving particularly popular.
As a result the foodservice sector overall has proved remarkably resilient, with just a handful of high profile business failures since 2008.
However, as the downturn continues, Horizons warns that 2012 is likely to be a worse trading year for eating out than 2011, despite the influx of visitors generated by the Olympic Games in London and the Golden Jubilee.
Horizons notes that consumer spend fell in 2009 and 2010 and last year was worse, with signs that the market fell in both nominal and real terms. Horizons estimates that the foodservice sector was down 3-5% in volume for 2011. The average price paid by consumers fell as a result of discounting and consumers selecting cheaper menu options and foregoing starters, desserts or side dishes.
