Bars, restaurants and casual dining

Come dine with us – February 2017

The latest edition of Come dine with us shows that M&A activity in the bars, restaurants and casual dining sector remains steady, despite uncertainty triggered by Brexit and market pressures.

Whilst the bars and pubs sector is highly susceptible to economic uncertainty and pressures on operational costs, confidence in the sector remains. Last year saw both trade and private equity review their estates triggering a raft of transactions from bars, to food-led pubs and pubs with accommodation.

‘The only certainty is uncertainty’

It is widely accepted that this year will be a more challenging environment, both as a result of Brexit fall-out and wider sector pressures. For the consumer, the ongoing uncertainty and rise in inflation will inevitably affect consumer confidence and spending. In a competitive environment, operators are having to contend with devalued sterling, elevated costs, squeezed margins, new legislation and recalibrated business rates.

But there is also opportunity. Whilst consumer confidence and expenditure could impact the UK leisure and eating out market, reduced domestic activity could be slightly offset by an increase in foreign tourists due to the fall in the value of the pound, alongside an increase in ‘staycations’.

Some of the key trends include:

The evolving pub market

Drink-led pubs and bars witnessed some pick-up in the latter part of 2016, and the latest Greene King Leisure Tracker recently demonstrated that consumers are favouring pubs as evening dining destinations, slightly ahead of restaurants and significantly ahead of fast food outlets. Food-led pubs continue to perform strongly and remain popular, often offering a more pleasant environment than the high street.

‘Eatertainment’

Consumers are increasingly seeking more than a meal when they eat out: attracted by out-of-home entertainment, and unique experiences that cannot be recreated at home. They are drawn to new formats and often it is emerging operators with single, or a handful of sites, that can be more nimble and innovative in their offering.

Spotlight on Indian

The British love affair with Indian food has a long history – the first curry house was established in Portman Square, London, more than 200 years ago. Indian restaurants have always been popular, but in the past few years they have gone from strength to strength. New entrants are establishing growing chains and offering new twists on an established cuisine.

Read the report
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