Eating-out sector in vital need of innovation, warns analyst

By Daniel Woolfson

- Last updated on GMT

Eating-out sector in vital need of innovation, warns analyst

Related tags: Economics, European union

The eating-out sector is in vital need of fresh ideas and innovation in the face of economic uncertainty throughout 2016, a leading analyst has urged.

The sector was likely to end the year with growth at 1.8% compared to last year’s 2%, warned Peter Backman, managing director of Horizons.

Speaking at the foodservice analysts’ annual briefing in London on 22 March, Backman said: “There is now some uncertainty in the economy, particularly with the question mark over the UK’s relationship with the EU.


“Some of the big restaurant and pub groups have reported slightly shaky figures for the first quarter with unimpressive like-for-like sales. I suspect this means we will see little growth throughout the rest of the year – at best sales are likely to grow slightly across the sector.”

‘Intense’ high-street competition had made like-for-like growth difficult to achieve, putting pressure on chains to grow sales, with expansion in the face of a declining number of quality new sites pushing rent prices up, he said, adding that smaller chains were likely to find innovation and growth easier.


Backman added: “Smaller companies can be more nimble, more adaptable and more able to maintain control – it is with the fledgling businesses that we are currently seeing the most growth in the UK in terms of new stores opening and many are bringing something new and innovative to the market, which means the larger players must too.”

Backman previously told The Publican’s Morning Advertiser ​that operators needed to invest in people​ to weather recruitment issues that could be caused by Brexit.

With no one able to accurately predict what kind of effect Britain leaving the EU would have on the hospitality industry, it was imperative that operators ‘think seriously’ about their ability to pay staff higher wages to retain them, he said.

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