Propel Morning Briefing

BDO – foodservice brands to look at restructuring options in 2018, pubs and bars to continue outperforming restaurants

Foodservice brands looking at restructuring options and pubs and bars continuing to outperform restaurants are among the key themes for 2018, according to a new report.

BDO has predicted what is in store next year as part of its latest restaurants and bars report.

It stated: “There will be a number of very well-known brands looking at restructuring options, including Company Voluntary Arrangements, and successful negotiation with landlords will be critical to re-establishing growth and value for those brands.”

“Pubs will lead the way in terms of non-distressed transactions and performance, with a mixture of value-led offerings from the large pub groups to the inevitable consolidation in the smaller groups. The other key area that will see consolidation is micro-breweries – particularly those beginning to expand their pub portfolio as the demand for craft beer and ale continues. The impact of delivery is only just being felt – not simply in own-site cannibalisation but through reducing the volume of site visits and decreasing average spend.”

“The power shift will continue to the delivery operators. As disposable income levels come under increasing threat, there will be greater competition for each pound spent. Expect to see improved food offerings from cinemas, bowling alleys, trampoline parks and the wider destination market. The ability to grow brand presence without expensive real estate and labour costs is going to become very appealing and so expanding a takeaway offering from a delivery hub or other outlet will increase.”

“Making the most of real estate is going to be a key theme for 2018 and expect to see many more partnerships between mainstream retailers trying to increase dwell time through quality food and drink offerings. With around a quarter of millennials being teetotal, a focus on non-alcoholic drinks is likely. This will include the development of mixer options for premium spirits so expect to see far more choice during the next 12 months.”

“Eating out is embedded in British culture to an extent not imaginable 40 years ago, but there is also a key focus on the health consequences so expect menus to include far more healthy options, especially for children. Where technology is used to facilitate service, increase value perception, enable ease of access and, ultimately, upsell effectively, it will add value. However, technology that is not user-friendly or is overtly pushy will turn customers away – and keep them away.”

 

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