Between 2012 and 2017, casual dining restaurants in the UK recorded continuous growth of around 4.8% a year.
(IBISWorld Reports, 2016 Chain Restaurants report)
Competition in this market sector is likely to continue over the next five years. Growing restaurants are having to evolve at a rapid pace to keep up with consumer demands.
With growth set to continue, there are still plenty of opportunities for talented casual dining operators. The MarketForce casual dining study of 3,000 British diners revealed that unsurprisingly consumers cared most about high-quality food and value received. But what else should brands consider when competing for market share?
We’ve narrowed it down to suggest the following three areas brands should keep in mind:
There is an increasing automation in the food preparation market. The longer-term trend of dropping salaries and wages as a percentage of revenue is likely to continue.
That being said, casual dining brands will have no choice but to continue investing in competent workers. For consumers, a full service is a key part of the total value proposition. Without outstanding service, consumers will not be willing to pay a premium price.
Before investing in a casual dining enterprise ask about how the business will engage and retain its staff. High staff turnover is a visible sign that there is something wrong. Effective training is a core part of engaging and retaining high-quality staff.
Casual dining brands must continuously seek new ways to entice customers with appealing menus. They must also be aware of the increasing demand for healthy yet delicious foods.
A business that has conducted extensive menu studies will undoubtedly be a more valuable investment, than one that has not. It will identify the effect of menu changes on loyalty, satisfaction and customer spending.
Technology is becoming increasingly present in casual dining outlets. In the MarketForce survey, 17% of respondents said that they had seen tablets at casual dining eateries, and no less than 51% of this group used them.
Casual dining outlets could effectively use tabletop gadgets to satisfy the ever-present demand for convenience. However, they still need to ensure that they process orders effectively and deliver the correct food to the table on time.
Even if you embrace tablet technology, a human being also needs to carry out check-backs during the meal, as it is unlikely that a machine will ever be able to replace a warm smile and attentive service.
In May, Martin Sherwood shared the stage at the Propel Finance and Investment Conference, where he explored how pub, restaurant and foodservice companies can navigate the current rules on Enterprise Investment Schemes (EIS). Joining him leading investors and entrepreneurs in the restaurant and bar industry gathered to share their knowledge and discuss key trends.
A recurring topic among the speakers was the importance of social media on restaurants success. Imbiba partner Darrell Connell explained that many restaurants have an active Instagram account before launching as it is considered an important contributor to a restaurants success. Technology in the form of social media channels has become a core asset when growing a successful casual dining outlet.
In conclusion, consumers nowadays want lower prices and greater convenience. That being said, this cannot come at the cost of inferior food quality and the value of service. Retaining competent employees and keeping up with technological advances with undoubtedly help new casual dining concept succeed.
Investing in Leisure
The Imbiba Leisure EIS Fund is a unique opportunity to invest alongside the Imbiba team into a portfolio of businesses in the bar/restaurant sector, with a focus on London through the Enterprise Investment Scheme. The fund has previously invested in 5 exceptional concepts to date.