No growth likely in eating out sector

By Michelle Perrett

- Last updated on GMT

Related tags: Peter backman

Backman: 2012 will be a difficult year
Backman: 2012 will be a difficult year
Growth is unlikely in the eating-out market during 2011, with 2012 likely to be a difficult year as consumers seek value. That's the prediction of...

Growth is unlikely in the eating-out market during 2011, with 2012 likely to be a difficult year as consumers seek value.

That's the prediction of Peter Backman, founder of market analysts Horizon. He claimed that trading in the eating-out market has been mixed over the past year — affected by a range of issues including the weather.

Backman said: "The Christmas period was a disaster for most sectors. In January there was no snow so people went out.

"The first quarter of the year has not been a bad period for the eating-out market, although I am unsure consumers will feel comfortable when the austerity measures start to bite.

"We are in for a tough time in the next few months."

While the overall eating-out market is showing a "mixed picture" regional variations are also affecting performance, he said.

"London is doing very well and has been in a bubble for the past year or so.

"Casual dining has performed moderately well. Some operators are doing well because they are getting it right or because the plans they put into place two or three years ago have worked. But overall it is tough.

"Everybody is fighting to get that pound in the consumers' pocket."

The weapon of choice to fight this for many has been deals, particularly two-for-one and meal-deal vouchers.

However, operators are becoming more canny about how they use these weapons.

They are now targeting them on specific menu items, which have been designed to take a margin hit, as well as in quiet trading times.

Operators are also using menu engineering to increase profits by directing consumers to the higher-margin items.

Innovation in the sector is slowing down but new menu items in the pub sector are coming from a range of places such as traditional British food to fusion, Mexican and Caribbean.

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