New research using Lumina Intelligence’s Operator Data Index indicates that the branded restaurant segment of the UK eating out market is set to experience outlet decline of -0.5% in 2021, following a catastrophic 2020, which saw outlet numbers decline by -17.1%.
The top 10 branded restaurants in the UK saw outlets decline at the slower pace versus the total branded restaurant segment, at -12.9% in 2020. This equates to a net loss of 280 sites in 2020.
In contrast, the top 10 branded restaurants are expected to see outlet decline outpace the overall segment in 2021. The top 10 are forecast to decline by -2.2% in 2021 compared to the total segments forecasted -0.5% decline.
Expected to grow by +7 and +5 sites in 2021 respectively, Wagamama and Nando’s are continuing to add to estates with propositions that meet consumer needs well. Furthermore, a high volume of empty properties as a result of the 2020 losses is set to provide opportunities for stronger operators to take on attractive sites for more affordable prices.
At the other end of the scale, Pizza Hut Restaurants and Prezzo are set to see outlet decline accelerate in 2021. Pizza Hut Restaurants is set to exit 29 sites in 2021 with its CVA being approved in late 2020. The brand is rationalising its estate to safeguard the majority of sites as it looks to move further into delivery. Prezzo is to close 22 sites permanently following the company’s acquisition by a new company owned investment firm Cain International.
Katherine Prowse, Insight Manager at Lumina Intelligence says, “After an incredibly challenging year, we expect to see outlet numbers stabilise in 2021, with the branded restaurant segment emerging as a leaner but stronger channel with estates rationalised and strategies in place to evolve, aligned with post coronavirus consumer needs.”
“The growth of Nando’s and Wagamama highlights the opportunities available for branded restaurants that adapt and meet the needs of consumers. The growth of delivery will continue to put pressure on operators to rationalise estates, as well as business strategies, but as consumer confidence grows and restrictions ease, we expect to see demand for dine-in solutions return swiftly.”
Find out more about the Lumina Intelligence Operator Data Index here.