The UK restaurant market is forecast to grow by +1.3% in 2024, reaching a total value of £19.0 billion. This growth is set to lag both inflation and the broader eating-out market, which is projected to expand by +2.6%. The latest Lumina Intelligence Restaurant Market Report highlights significant challenges for the sector, including rising costs, expensive debt, and a challenging business environment, particularly for independent operators.
Independent restaurants, which make up 83% of the market by outlets, are experiencing notable pressures. The total market is expected to see a net closure of six restaurants every week in 2024, leading to a -1.2% decline in outlets, with the total number falling to 26,566 sites. Rising business rates and staff costs are contributing to this trend, with closures predicted to continue through 2025-2027 as many sites become financially unviable.
The report emphasises the critical role wholesalers must play in supporting innovation within the independent sector to help sustain this vital part of the industry.
Despite these challenges, the return of weekend social dining occasions in 2024 has presented a clear opportunity for operators. Consumers are increasingly choosing restaurants for weekend lunches, trading up from retail and pubs, which offers a promising avenue for driving transaction values. However, overall dining frequency has remained stagnant at an average of 1.1 occasions per week, underscoring the need for operators to find ways to encourage consumers to dine out more often.
The report also reveals the dual challenge faced by operators as they seek to leverage automation to improve efficiency while maintaining the quality of customer experiences. Consumer preferences are increasingly focused on quality dining, global cuisines, and strong value propositions, creating opportunities for businesses that can adapt to these trends.
“The UK restaurant market continues to face significant headwinds, with rising costs creating tough conditions, particularly for independents,” said Insight Lead Katie Gallagher. “There are opportunities for operators that can harness consumer trends, innovate, and deliver strong value propositions.”
