Discount-hungry customers biggest challenge for operators

By Mark Wingett, M&C Report

- Last updated on GMT

Related tags: Title m&c report, Restaurant

Contrasting mega trends of healthy eating and indulgence foods are affected by day parts
Contrasting mega trends of healthy eating and indulgence foods are affected by day parts
Discount driven customers are the top challenge for the eating and drinking our sector, according to a new survey.

Allegra Food Service’s Top of Mind​ research - a poll of top executives in the food and beverage industry - found 38% saw it as the top challenge. This put it at number one in the list – up from fourth last year.

Simon Stenning, executive director at Allegra, told the PMA's​ sister title M&C Report​: “That is the impact of Lidl and Aldi, fuelled by the marketing activities of the branded restaurant and pub chains and the concern is moving customers away from that mindset.

“It’s a problem that all retailers are facing and the foodservice industry is no different. Customers have got a value mindset -  a legacy from the recession. This is where we have a little bit of a squeezed middle. The value operators will continue doing well. Wetherspoon’s is a great example of this. Forget what the city says about margin. They are delivering great value and the customers are flocking to them.

“But at the same time you have operators flourishing at the other end of the spectrum where customers have no problem with paying £50 for lunch. It’s the operators caught in the middle that have the problems.”

Eating trends

The latest research from Allegra showed the value growth of the UK out-of-home market had grown 2.7% in the last quarter, down slightly from 2.8%. It is expected to grow by 2.9% in 2015.

The eating out market has seen a 4% increase in participation and average number of meals eaten out per month to 9.2, but the average spend per visit has fallen 13% to £9.25. Allegra has put the recent growth in participation down to the growth in breakfast and lunch.

Stenning said the seemingly contrasting mega trends of healthy eating and indulgence foods were affected by day parts.

He said: “It’s the debit and credit balance – having a super-food salad at lunchtime and then indulge a dirty burger in the evening or a detoxifying juice in the day and a whizz-bang cocktail at night.”

The 130-strong restaurant brand portal has seen physical growth over the year with 800 more outlets expected to be added over this year, up from 625 last year. Among the top 10 growth brands were Subway and Bill’s.

The survey showed the key long-term consumer trends impacting the eating out market 2015 were convenience with 43% and eating-on-the-move/more mobile lifestyle with 35%

In terms of future corporate competencies for business success in the next five years – 42% said building customer loyalty.

Related topics: Other operators

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