insights into the evolving restaurant and takeaway …...customer insights can help the sector gain...
TRANSCRIPT
A taste for changeInsights into the evolving restaurant and takeaway sector
3 Executivesummary
5 Dynamicsofachangingmarket
7 Cheaperdiningoptionsdrivingsectorgrowth
9 Demographicsshapingdininghabits
13 RegionalsalesshowNorth–Southdivide
15 Customersgetatastefororderingonline
17 Brandloyaltyontheslide
19 Wideninggapbetweenweekdayandweekendspending
20 HowBarclaysMarketandCustomerInsightscanhelp
21 Reporthighlights
22 Aboutthisreport
Contents
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Executive summaryOuranalysisofthediningchoicesandspendingofmorethan8millionBarclaysdebitcardandBarclaycardcustomersreflectwhatweareseeingupanddownthecountryinthisrapidlyevolvingmarket.
Thefindingsshowoverallsalesgrowthacrossthesectorof11.5%intheyearendingJune2018.Thishaslargelybeendrivenbythefastfood,takeawayanddeliverysectorattheexpenseoffullservicerestaurants,particularlyinthecasualdiningsub-sector.
Underlyingprofitability–orlackofit–maybeanentirelydifferentstoryand,asever,thesectorwouldbewelladvisedtoensureitdoesnotputthe‘vanity’ofturnoverbeforethe‘sanity’ofprofits.
Despitegrowthinsales,operatorsarefacinga‘perfectstorm’ofsignificantover-supply,subduedconsumerdemandandchallengingeconomicheadwinds,leadingtointensecompetitionandpressureonmargins,addingtothechallengesofrespondingtochangingconsumertastesandgreaterhealthawareness.
Thiswillnodoubtcontinueuntilthereisafundamentalmarketcorrection,whichmayinturncreateopportunitiesforsome.However,whilesupplymaybedecliningslowly,itisbynomeansfallingoffacliff,withthemajorityofrestaurantsthatcloseseeminglyreplacedbynewonesfairlyrapidly.
Overallsalesconcealkeytrends
Theheadlinegrowthtrendalsohideswidelyvaryingfortunesamongthetoprestaurantandfastfoodbrands,withsomeperformingfarbetterthanothers.Inpartthissimplyreflectsthehugevarietyofdiningoptions,fromincreasinglydiversetakeaways,toestablishedcasualdiningbrands,topremiumrestaurants.
Althoughalimitednumberofthesebrandshavemanagedtobuckthetrend,themarkethasbecomeaccustomedtoprofitwarningsandrestaurantclosuresfromsomeofitsbiggestnames.Infact,formostdiningoperators,itisprobablyfairtosaythatflatyear-on-yearsalesgrowthisseenasaprettyhealthyoutcomeinthecurrentenvironment.
Location,location,location
Alookatthedataunderlinesthecriticalimportanceoflocation,overandaboveevenqualityofsite.
WhilethehugeLondonmarkethassufferedasaresultofhigherbusinessratesontopofalreadysky-highrents,anumberofcitylocationsoutsideLondonhaveseenmuchstrongergrowth,albeitfromalowerbaseline.
SomecasualdiningchainsinparticularhavebeenverysuccessfulatrollingoutaprovenformulatosmallercitiesoutsideLondon.However,theexperienceofsomechainssuggeststhatcautionisrequiredtoensurethathavingtoomanyoutletsinthesamecitydoesn’tleadtoabrandcannibalisingitsownbusiness.
Theheadlinegrowthtrendalsohideswidelyvaryingfortunesamongthetoprestaurantandfastfoodbrands.
Anoverallsalesgrowthacrossthesectorinyear2of
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Driving customer value
Our findings indicate that customers are generally trading down, primarily from casual dining to fast-casual and fast food, with a strong trend towards dining more frequently but more cheaply.
Average transaction values (ATVs) have declined slightly overall. However, higher volumes of low-ATV fast food and takeaway transactions more than offset this, giving the lower end of the market the highest ‘customer value’ in real terms.
Age, too, is a significant factor. The Instagram generation of millennials has emerged as a key customer group, while showing low brand loyalty and being heavily influenced by promotions and discounting. Indeed, customers as a whole are dining with a broader range of brands, reflecting more adventurous tastes and the growing number of options available. This raises important questions about how brands continue to differentiate themselves and how they retain authenticity as they grow.
The performance of bars serving food reflects something of a renaissance in the wet-led market – albeit one that is heavily influenced by the weather and major events. A year that has seen the ‘Beast from the East’, followed by a Royal Wedding, the World Cup and the hottest summer on record has clearly had a very different impact on wet-led as opposed to dining-led brands.
Food delivery is also clearly growing in importance, fuelled by the popularity and convenience of a new generation of delivery apps that are also increasingly being embraced by higher-ATV ‘gourmet’ brands.
Harnessing the power of data insights
In the face of the trends highlighted in this report, it is more important than ever for the dining sector to truly understand its customers and be agile enough to react quickly to changing consumer preferences.
We have identified nine key customer segments in this report and look at how their varying spending patterns are transforming the way they dine out and, increasingly, dine in.
This is just one example of how Barclays Market and Customer Insights can help the sector gain a more detailed picture of its customers based on their actual spending behaviour. We have included examples throughout this report of how restaurant and bar operators can capitalise on the wealth of customer data we can provide.
Whether it’s identifying the most significant and dynamic trends in the market, using location-specific data at postcode level to inform your next outlet opening, or week-by-week transaction analysis to help you understand changing customer tastes and spending patterns, these are powerful insights based on hard transaction data to help you make informed decisions.
Philip Richardson Director Hospitality and Leisure Barclays Corporate Banking
Customers as a whole are dining with a broader range of brands, reflecting more adventurous tastes and the growing number of options available, which raises important questions about how brands continue to differentiate themselves.
Raj Pattni Head of Insights Platform Barclays UK
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Dynamics of a changing marketHighlights
• Stronggrowth,butmarketcompositionchanging
• Restaurantslosingmarketsharetofastfoodandtakeaways
• Customersshiftingtowardscheaperdiningoptions
• Averagecustomervaluehighestforfastfoodandbarsservingfood
Ouranalysisofcustomerspendingshowsstrongindustrygrowthoverall,butwidevariationacrossdifferentdiningcategories.
Totalsalesofrestaurantandtakeawaymealsgrewby11.5%intheyeartoJune2018.However,thestoryunderlyingthesector’soverallgrowthisoneofrapidchange.
Shiftingmarketshare
Ourtransactiondatashowsdemandforfastfoodandtakeawayssteadilyincreasingandoutperformingfullservicerestaurants,withoverallsalesgrowthof20.6%and7.2%respectively.
Whilerestaurantsstillclaimthelargestshareofthemarketat65.7%,thisrepresentsadecreaseof2.6%inmarketshareoverthelastyear.Bycontrast,fastfoodandtakeawaysaleshavegrown2.8timesfasterthanthefigureforrestaurants,resultinginmarketshareincreasingto34.3%.
Ouranalysisreflectsthechallengesthatsomefamiliarhouseholdbrandnameshavefacedasconsumertastesbecomemoreadventurous.Theperformanceofthetop
Year-on-yearsalesgrowth Fastfood&takeawayvsFullservice
Fastfood&takeaway
30%
25%
20%
15%
10%
5%
0%
Jul-17
Jan-18
Aug-17
Feb-18
Sep-17
Mar-
18
Oct-17
Apr-18
Nov-17
May
-18
Dec-17
Jun-18
-50% 0% 50% 100%Fullservicerestaurants
Marketshareinyear2Fastfood&takeawayvsFullservice
Salesgrowthvariation Top100brands
100restaurantandtakeawaybrandsasmeasuredbytotalsalesintheyeartoJune2018demonstratessignificantvariationunderlyingtheoverallindustrytrend.
Themajorityofthetop100brandssawsalesgrowthoverthepastyear,butthisrangedfrom66%forthetopperformer,toa42%declineinsalesattheotherendofthescale.Thisisperhapstobeexpected,giventhatanumberoflargerrestaurantchainshavefacedmorechallengingtradinginthefaceofexpensivepropertyoverheads,risingbusinessratesandweakerconsumerspending.
Month-on-monthsalesgrowthoverthepasttwoyearsshowsasimilarpatternforfastfood/takeawayscomparedtofullservicerestaurants.ThegapbetweenthemhasbeenfairlyconsistentuntilnarrowinginQ22018.
Fastfood&takeaway
34% 66%
Fullservicerestaurants
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Customervalueupforlowerprice-pointbrands
Someinterestingpatternsemergewhenwelookataveragecustomervalue(ACV)–totalsalesdividedbythenumberofdistinctcustomers.Consumersarespendingmorefrequentlyinlowprice-pointcategoriesastheyshifttowardscheaperdiningoptions.
Althoughfastfoodandtakeawayshavethelowestaveragetransactionvalue,thehighvolumeoftransactionsatthisendofthemarketgivesitthehighestaveragecustomervalue.
Theseincreasesmustbeconsideredagainstthebackdropofa3.7%declineinaveragetransactionvalueoverall,indicatingthatconsumersarechoosingtospendlessperpurchase.
Unsurprisingly,frequencyoftransactionsdeclinesasrestaurantprice-pointincreases.Consequently,premiumrestaurantsenjoythefewestaveragevisitspercustomercomparedtoallotherdininggroups.However,thisistheonlycategorytoexperienceadeclineinfrequencyofvisitsovertheperiodinouranalysis,withafallof2.7%.
Atthesametime,frequencypercustomerrosethemostforoutletsinlowerprice-pointrestaurantcategories.
Fastfoodandtakeawaysareoutperformingfullservicerestaurants.
Averagespendfrequencypercustomer
Averagecustomervaluebydiningcategory
Year1 Year1 Year1 Year1 Year1Year2 Year2 Year2 Year2 Year2
18
16
14
12
10
8
6
4
2
0Fastfood
&takeaway
15.3
7.86.3
5.3
2.1
16.5
9.0
6.55.4
2.0
£155.68 £166.44 £82.06 £160.10 £137.15£173.35 £172.98 £84.09 £155.20 £135.05
Barsservingfood
Fast-casualdiningrestaurants
Casualdiningrestaurants
Premiumrestaurants
Theconsumerhasbecomeincreasinglydiscerninginafiercelycompetitivemarket,butthoseoperatorswithadifferentiated,authentic,value-for-moneyexperiencewillcontinuetowinout.Pop-upsandstreetfoodoperatorsarereinvigoratingthesectorastheconsumertakesamoreexperientialandadventurousapproachtodiningout.
PhilipRichardsonDirector,HospitalityandLeisure,BarclaysCorporateBanking
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Fastfood&takeaway
Fastfood&takeaway
Barsservingfood
Barsservingfood
Fast-casualdiningrestaurants
Fast-casualdiningrestaurants
Casualdiningrestaurants
Casualdiningrestaurants
Premiumrestaurants
Premiumrestaurants
Cheaper dining options driving sector growthHighlights
• Salesandtransactionsupacrossalldiningcategories
• Affordablediningoptionsgrowingfasterthanhigheraveragetransactionvaluerestaurants
• Takeawaysandbarsservingfoodincreasingmarket shareandshareofwallet
Winnersinagrowingmarket
Ouranalysisoftransactionsacrossthevariousdiningcategoriesshowsthatsalesgrewacrossallcategoriesinyear2,withfastfoodandtakeaways,andbarsservingfoodthebiggestsuccessstoriesintermsofmarketshare.
Fastfoodandtakeawayshaveseena20.6%increaseinsalestocapture34.3%ofthemarket,anincreaseof2.6%,asconsumersoptforconvenienceandaffordability.
Averagetransactionvalueinthefastfoodsectorincreasedby3.2%,morethananyotherdiningcategory.Barsservingfoodgrabbed26.6%ofthemarket,withasignificantincreaseintotaltransactions,butsufferedthelargestfallinaveragetransactionvalue,down9.3%,indicatingthatcustomersmightvisitthemmoreoftenbutarespendinglesspervisit.
Fast-casualsalesgrowthwasinlinewiththeoverallmarket.Casualdiningsalesgrowthofjust1.4%toJune2018meansitssliceofthemarketwas2.5%lowerthanthepreviousyear.
Premiumrestaurantsweretheonlydiningcategorytoseeadeclineinfrequencyofvisits,down2.7%,whiletheirmarketshareremainedfairlystable.
Year-on-yearsalesandtransactions
Marketshareinyear2
20.6%
16.9%
3.2%
11.7%
23.1%
11.5%12.4%
-0.7%
1.4%
5.4% 6.0%4.7%
1.2%
34% 27% 10% 25%
-3.8%
-9.3%
4%
Salesgrowth Transactionsgrowth ATVgrowth
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Affordablediningprovingincreasinglyattractive
Ouranalysisclearlyshowsthataffordablediningoptionsaregrowingatafasterratethanmoreexpensiveones.
Theproportionforsalesinfast-casualandpremiumrestaurantsremainedstatic,butdeclinedby2.5%to24.8%forcasualdiningrestaurants.
Capturingshareofwallet
Shareofwalletrepresentsafurthersuccessstoryforfastfoodandtakeawaydining,whichclaimsthegreatestproportionat39.8%,anincreaseof0.8%onyear1.
Fortheotherdiningcategorieswalletshareremainedsteadyinthesameperiod,exceptforcasualdining,whichdecreasedby1.5%to23.8%.
Lookingforfurtherinsights?
Ouranalysisreflectsincreasingpressureonsomeestablishedbrandnames,particularlyinthecasualdiningmarket.
Asconsumertastesandexpectationschangeinanincreasinglydynamicsector,itisessentialthatexistingbusinessmodelsadapt.
OurMarketandCustomerInsightscanhelpyouto:
• assessyourbusinessperformanceagainst widermarkettrends
• identifywhereyourlapsedcustomersaredining
• evaluatethestrengthsandweaknessesofyourrestaurantorfastfoodnetwork
• gainadeeperunderstandingofyourcustomersandidentifypotentialnewopportunities.
Shareofwallet
Ouranalysisclearlyshowsthataffordablediningoptionsaregrowingatafasterratethanmoreexpensiveones.
Fastfood&takeaway
Year1shareofwallet
Year2shareofwallet
Barsservingfood
Fast-casualdiningrestaurants
Casualdiningrestaurants
Premiumrestaurants
39.0%
39.8%
23.1%
23.6%
10.2%
10.3%
25.3%
23.8%
2.4%
2.4%
NB:Walletshareonlyincludesdataofcustomerswhomadeatransactioninbothyear1andyear2.
MajorsocialorsportingeventssuchastheWorldCupandRoyalWedding,alongwiththeweather,continuetoinfluencebusinessperformanceinthesector.WarmerweatherhelpedpubsandbarsinJuneandJuly,whilethecoolerweatherinAugustsawthependulumswingbacktowardsrestaurants.
PhilipRichardsonDirector,HospitalityandLeisureBarclaysCorporateBanking
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Demographics shaping dining habitsHighlights
• Topthreecustomergroupsbysize:AffluentCentreStage,DynamicWorkforceandFamilyBackbone
• AffluentCentreStagespendsmostineverydiningcategory
• KeyInstaAppetitegroupseeingfastestgrowthinspending
Wehaveidentifiedninekeycustomersegmentsbasedondemographicprofileandspendinghabits.
Basedonsalesgrowthandoverallspending,thethreemostvaluablecustomersegmentsidentifiedbyouranalysisareInstaAppetite,AffluentCentreStageandEmergingEagles.
Fastfood&takeaway
Fast-casualdiningrestaurants
Premiumrestaurants
Barsservingfood
Casualdiningrestaurants
Consumersegments
Salesdistributionbycategory
25– 4925–4918–24 MidtoHigh
LowtoMid
LowtoMid
Nochildren
Nochildren
Nochildren
25– 49 LowtoMid
Youngchildren
Key differentiators• Incomeislikelytobe
subsidisedbystudentloansandfamily
• Low-value,buthigh-frequencyshopperswitheatingoutfrequencydoubletheaverage
• Spendpertransactionisthelowestat£12
Key differentiators• Lowerincomegroup
• Spendpertransactionislowat£13andfrequencyisbelowaverage
Key differentiators• Averagespenderswith
ATVat£15
• Highfrequencyof transactions
Key differentiators• Shoppingtendstofocus
oncheaperstores
• Averagetransactionvalueislowat£14,frequencyofspendoneatingoutisaverage
Family Backbone
Familiesontightbudgets
Prime Shoppers
Affluentadultswithhighvalueandfrequentspend
Dynamic Workforce
Youngadultswithnochildrenonlowincomes
Insta Appetite
Students,recentgraduatesandyoungadults
46%
19%13%
20%
3%
44%
22%
10%
21%
2%
35%
24%
12%
24%
5%
47%
20%
9%
22%
2%
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Consumersegments
Salesdistributionbycategory
Key differentiators• Thelargestsegmentby
customervolume
• Highestfrequencyshopperswithaveragespendper transactionat£17
Key differentiators• Lowfrequencywithaverage
ATVat£18
Key differentiators• Spendfrequencyisaverage,
butATVisoneofthehighestat£24
• ThisgroupislikelytoexpandwithageingpopulationintheUK
Key differentiators• Thelowestspendfrequency
withATVof£26
• AveragecustomervalueperannumishalfthatofQualityFanaticsandtransactionsarelessfrequent
Key differentiators• Wealthycustomersnearing
retirement
• ThehighestATVof£36,morethandoubletheaverageATV
• Thefrequencyofspendat10transactionsperyear
Quality Fanatics
Better-offretireeswhodon’tshopoften,butwhentheydo,
theyprioritisequalityandcanaffordtosplashoutor
treatfamily
Core Necessity
Low-to-mediumretirementfundsmeanthatthisgroup
ofolder,likelyretired,customersisonabudget
Rare Indulgence
Poorergroupwithlowincomeandlowspend
Emerging Eagles
Withgrown-upchildren,theyregaintheirsparetimefor
hobbies,travelandshopping
Affluent Centre Stage
Affluentfamilies
34%
25%
10%
26%
4%
26%
36%
8%
27%
3%
17%
37%
8%
31%
7%11%
51%
8%
28%
3%6% 6%
31%
6%
50%
65+ MidtoHigh
Somehavechildren
65+ LowtoMid
Somehavechildren
50–64 MidtoHigh
Somehavechildren
50–64 LowtoMid
Somehavechildren
25– 49 MidtoHigh
Youngchildren
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Keycustomergroupscallingtheshots
Ouranalysisofthebehaviourofthesedifferentcustomersegmentsshowsthattheirspendingvariesconsiderably,withyoungerandmoreaffluentcustomersdrivinggrowth.Thereareanumberofpointerstotheinfluenceofspendingpatternsamongrelativelytime-poorconsumers,busyfamiliesandmillennials.
IntermsofsizethetopthreecustomergroupsfortherestaurantandtakeawaysectorareAffluentCentreStage,DynamicWorkforceandFamilyBackbone.
Thegraphicoppositeshowstheinfluenceofeachofthesemarketsegmentsforeachdiningcategoryoncerelativesalesgrowthandthesizeofeachsegmentistakenintoaccount,asanindicationofkeyfuturegrowthopportunities.
AffluentCentreStageisbyfarthelargestgroup,comprising20%ofdiningcustomersinthepastyear,deliveringthehighestproportionofbothoverallsales(30.8%)andtransactions(28.5%)ofanygroup.
ThenextlargestgroupsareDynamicWorkforce,forming18.2%ofthecustomerbase,andFamilyBackbone,makingup12.5%andcontributingaverysignificantproportionofsalesandtransactions.
Affluentfamiliestakecentrestage
Therelativeimportanceofthedifferentcustomergroupstoeachdiningcategoryvariesquitesignificantly,buttheAffluentCentreStagesegmentisundeniablyakeysegmentacrossallcategories.Ithasspentmoreoverthepasttwoyearsthananyothersegmentineverydiningcategory.
Customersinlower-incomegroups–DynamicWorkforceandFamilyBackbone–spendrelativelymorethanothersinthefastfoodandtakeawaycategory,whiletheCoreNecessitiesandQualityFanaticsgroupsover-indexforbarsservingfoodcomparedtoothergroups.
Unsurprisingly,customersinmoreaffluentgroupssuchasEmergingEagles,AffluentCentreStageandPrimeShoppersarethestrongestspendersinpremiumrestaurants.
TheAffluentCentreStagesegmentspentmoreoverthepasttwoyearsthananyothersegmentineverydiningcategory.
PremiumrestaurantsFastfood&takeaway Fast-casualdiningrestaurants CasualdiningrestaurantsBarsservingfood
Top3segmentsforeachcategorywhenyear-on-yearsalesgrowthandsegmentsizearetakenintoaccount
40%
35%
30%
25%
20%
15%
10%
5%
0%InstaAppetite Dynamic
WorkforcePrime
ShoppersFamily
BackboneAffluent
CentreStageRare
IndulgenceEmerging
EaglesCore
NecessitiesQualityFanatics
Year2customerdemographicdistributionbydiningcategory
Fast food & takeaway
Full service
InstaAppetite1InstaAppetite 1
AffluentCentreStage2Affluent
CentreStage 2
EmergingEagles3Dynamic
Workforce 3
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InstaAppetitekeytogrowth
Lookingatthethreegroupsthataremostimportantineachdiningcategory–takingintoaccountbothsizeandyear-on-yearsalesgrowth–InstaAppetiteisclearlythenumberonesegment,driveninparticularbyitsenthusiasmforfastfood/takeawaysandbarsservingfood.
Salesgrowthof33.6%intheInstaAppetitesegmenthasresultedina2.8%increaseinthisgroup’sshareofsales,drivenbyfastfood/takeawaysandbarsservingfood.Thisgroupaccountsfor17.6%ofallsalesand23.5%ofalltransactions,significantlyhigherthanthesecondandthirdlargestgroups.
Viewedinthisway,AffluentCentreStagebecomesthesecondmostimportantgroupinalldiningcategories.EmergingEaglesformsthethirdmostimportantgroupforeverycategoryexceptfastfoodandtakeaways,andDynamicWorkforcetakesfourthposition.
Thebubblechartoppositeshowsthespendingpowerofeachsegment,asmeasuredbytheshareoftransactionsandsalesitmakesup.Therearethreedistinctgroupsofsegments,withlow,mediumandhighspendingpowerrespectively.Thesizeofthebubblesreflectstheshareofcustomersinthesegment.InstaAppetiteandAffluentCentreStagehavethehighestspendingpowercomparedtoallothersegments.
NB.ThischartshowstherelationshipbetweenTransactions(Y-Axis),Sales(X-Axis),andVolumeofCustomers(%)(BubbleSize).
InstaAppetiteisclearlythenumberonesegmentacrossallcategories.
Segmentsizeandcontributioninyear2
Lookingforfurtherinsights?
Ouranalysisshowstheimportanceofunderstandingyourlargestdininggroupsandtheirrespectivespendingpower.Analysisofthesechangingdemographicsegmentscanhelpyouidentifynewopportunitiesandplanforthefuture.
Ourinsightscanenableyouto:
• deepdiveintocustomers’diningbehaviourwithineachsegment
• evaluatethesizeforeachmarketsegment
• understandeachsegment’sshareofthewallet.
InstaAppetite
RareIndulgence
DynamicWorkforce
EmergingEagles
PrimeShoppers
CoreNecessities
FamilyBackbone
QualityFanatics
AffluentCentreStage
20.0%
12.0%
18.2%12.5%6.9%
8.7%4.8%5.6%
11.4%
5% 10% 15% 20% 25% 30% 35%
35%
30%
25%
20%
15%
10%
5%
0%
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Salesgrowth–regions
On-premisessalesgrowthoutsideLondon
Regional sales show North–South divideHighlights
• Salesgrowthinthecapital5.5%belownational average
• Lowerregionalvariationinonlinesalesgrowth
• Top5growthareasoutsideLondon
AnalysisofdiningtransactionsindicatessomethingofaNorth–Southdividewhenitcomestosalesgrowth,withfastergrowthintheNorth.
BasedonrestaurantlocationtheNorthsawa12.3%growthinsalesintheyeartoJune2018,comparedtojust5.8%intheSouth,whereitwas2.1%belowthenationalaverage.However,theSoutheasilyaccountsforthelargestshareofsalesat67.3%.
Thetopfiveareas–asmeasuredbyon-premisessalesgrowthandsalesproportionoutsideofLondon–istoppedbyManchesterat12.6%.
LowersalesgrowthintheSouthisprimarilydrivenbytheperformanceofthecapital’srestaurantandtakeawaymarket,particularlyincentralLondon,althoughthesefiguresdonotincludespendingbyoverseasvisitors.
Evenso,thecapitaleasilyclaimsthehighestproportionofsalesofallregions,standingat29.1%,withSouthEastEnglandcominginsecondhighestat16.6%.
Whileface-to-facetransactionsvaryconsiderablyacrossthecountry,acomparisonofregionalsalesgrowthforonlinedeliveryordersonly(basedoncustomerlocation)revealsfarlessregionalvariation,suggestingthattheoverallupturninonlinetransactionsislargelyunaffectedbylocation.
Manchester Cardiff Birmingham Newcastle Chelmsford
WestMidlands
EastMidlands
EastMidlands
London
EastofEngland
SouthWest
0% 5% 10% 15% 20% 25% 30%
13.6%
27.3%
11.5%
26.8%
24.2%
2.4%
On-premises Online
NB.Top5areasoutsideLondonselectedbasedonsales%inyear2.
12.6%
11.3% 11.2%
9.4% 9.3%
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Scotland
NorthEast
Wales
NorthernIreland NorthWest
YorkshireandTheHumber
EastMidlands
WestMidlands
EastofEngland
London
SouthEast
SouthWest
13.2%
On-premisessalesgrowthbyregioninyear2
Lookingforfurtherinsights?
Ourdatashowswidevariationinregionalsalesgrowth,withmanycitiesoutsidethecapitaloutperformingLondon.
Inadditiontointelligenceonpopulationtrends,knowingthelocalenvironmentinsideoutisclearlycriticalwhenmakingdecisionsaboutwheretoopenorcloseyournextrestaurant,barortakeawayoutlet.
Ourinsightscanhelpyouevaluatecustomerspending(subjecttoprivacyrules)downtopostcodesacrosstheUKandhelpyouto:
• identifylocationswiththemostpotentialfor growth
• compareexistingoutletperformanceagainst areatrends
• verifyyourexpansionordown-scalingplans.
11.9%
10.9%
22.6%
12.0%
12.6%
11.5%
13.6%
9.2%
2.4%
7.7%
9.8%
Over-supplyalignedwithhigherinputcostsiscausingpressureinthemarket.Thatsaid,thedemandforgoodlocationsremainsstrong–ourMarketandCustomerInsightsanalysishasbecomeincreasinglyimportantasoperatorsseektomakeinformeddecisionsontheirstrategicexpansionbasedonhardfacts.
PhilipRichardsonDirector,HospitalityandLeisureBarclaysCorporateBanking
14of22
Customers get a taste for ordering online Highlights
• Onlineordersgrowingfasterthanface-to-face
• Averagespendhigheronline
• Oldercustomersaremorelikelytodineoutprimarilyatfullservicerestaurants
Ouranalysissuggeststhatdemandfortakeawaydeliveriesisontheriseasthewaveofnewdeliveryappsincreasestheconvenienceoforderingarangeoffoodtoeatathome,drawingcustomersawayfromeat-inrestaurants.
Whilethevastmajorityofsalescontinuetobemadeusingface-to-face,‘offline’transactionsatdine-inrestaurantsandtakeaways,peoplepayingfortakeawaysonlineviamobile
devicesisgrowingfaster.Theproportionofonlinesalesincreasedby2%inyear2.Thedevelopmentofeasy-to-useappsandwebsitesbymanypizzaandotherfastfoodchains,alongwiththeproliferationofonlinedirectoryservices,isclearlyhavingasubstantialimpactonthemarket.Thisisincreasinglybeingembracedbyhigher-ATVbrandsthroughpartnershipswiththedeliveryapps,althoughmanyfeartheresultingimpactonhigher-marginon-premisesalcoholsales.
Face-to-facepurchasesaccountfor83.5%oftotalspend,up8.9%year-on-yearwithanaveragetransactionvalueof£14.99.However,onlinetransactionsgrewby26.7%,withahigheraveragetransactionvalueof£21.10.Thissawtheiroverallshareofsalesincreaseto16.5%inyear2.
Theaveragenumberoftimesacustomermadeacontactlesstransactionhasincreasedby16.1%.Unsurprisingly,giventhecurrent£30limitonthispaymentmethod,thisisdisproportionatelyassociatedwithlowerprice-pointcategories.
TheseasonaltrendforonlinepurchasesshowssalesdeclininginJulyandAugustandpeakinginJanuary,perhapscorrelatingwithlowertakeawayconsumptionduringtheschoolsummerholidayperiodandconsumersreigninginspendingafterChristmas.
Easy-to-useappsandwebsitesbymanypizzaandotherfastfoodchainsareclearlyhavingasubstantialimpactonthemarket.
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Ageandincomekeytoonlinegrowth
Despitetheapparentgrowthinpopularityofhomedelivery,onlyaverysmallproportion,2.4%,ofcustomersusedonlyonlinetransactionsviatheinternetandoverthephone,whilethemajority,62.2%,boughtfoodwithface-to-facetransactionsonly.
Amongthe35.4%ofpeoplethatselectedbothdeliveryandon-premisesdiningoptionstheInstaAppetiteandAffluentCentreStagegroupsdominate.OldercustomersintheEmergingEagles,CoreNecessitiesandQualityFanaticsgroupsprefertraditional,fullservicedining.
Adaptingtothedemandforgreatervarietyandhigherquality‘gourmet’takeaways,andallowingcustomerstopurchaseconvenientlythroughtherightplatform,willclearlybecriticaltofuturegrowth.
Operatorswillnodoubtcontinuetobemindfuloftheimportanceofconsistencyofproductandthefactthattheeatingoutexperiencecanfundamentallyaffectthewillingnessofacustomertodinein.
Lookingforfurtherinsights?
Ouranalysisshowsthegrowingimportanceofonlinefooddeliveryinthemarket.
Understandingyourcustomers’channelpreferenceandhowtheyspendwithinthosechannelsisvitaltohelpyouinvestinthemosteffectiveomni-channelcustomerexperience.
Ourinsightscanprovideyouwithvaluableintelligenceon,forexample:
• yourcustomers’channelpreferencefordifferent foodcategories
• yourchannelgrowthperformanceagainst overallindustrytrends
• howyouronlinecustomersdineoutelsewhere.
Customerchannelselectioninyear2
%ofsalesovertimeinindustry
On-premisesonly
62.2%
Both
35.4%
Onlineonly
2.4%
Jul-16 Sep-16 Nov-16 Jan-16 Mar-16 May-16 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18
%Online %Cumulativeonline
20%
15%
10%
5%
0%
Thedeliverymodelisheretostay.Notonlydoestheconsumergetmoreconvenienceandchoice,itprovidesinnovativebusinesseswithanopportunitytoexpandintothesectorwithouttheusualset-upcostsassociatedwithopeningarestaurantonthehighstreet.
PhilipRichardsonDirector,HospitalityandLeisureBarclaysCorporateBanking
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Averagenumberofbrandspercustomerbycategory
Averagenumberofbrandspercustomerbysegment
Brand loyalty on the slideHighlights
• Customersdiningwithabroaderrangeofbrands
• Premiumrestaurantshavethegreatestbrandloyalty
• Brandloyaltygreaterinolderpeopleandlowincomegroups
• InstaAppetitegroupisleastbrandloyal
Accordingtoouranalysis,youngercustomers,strivingprofessionalsandaffluentfamiliesappeartobechoosingtospendtheirmoneyonagreatervarietyofrestaurantandtakeawaybrands,nodoubtreflectingmoreadventuroustastesandthegrowingvarietyofdiningoptionsavailable,suchastheincreaseinvegetarianchoices.
Thissuggeststhatconsumersaremorewillingtoexperimentbeyondtheircorego-todiningbrands,whichmayhaveimportantimplicationsforlargerbrandnamefranchisechainsinparticular.
Theaveragecustomerboughtfoodfromeightdiningbrandslastyear.Barsservingfoodwerethemostpopular,witheachcustomerbuyingfoodanddrinkfromanaverageoffourofthem.
Ingeneral,theaveragenumberofbrandspercustomerwashigherinlowprice-pointrestaurants,althoughitislowerinthefast-casualthanthecasualdiningcategory,whilepremiumrestaurantshavethegreatestbrandloyaltybythismeasure.
InstaAppetite DynamicWorkforce
PrimeShoppers
FamilyBackbone
AffluentCentreStage
RareIndulgence
EmergingEagles
CoreNecessities
QualityFanatics
11.9
13.3
6.2 6.1
11.8 11.3
6.6 6.8
10.8 11.2
3.7 3.8
6.2 6.6
2.9 2.94.2 4.3
Year 1
Year 2
Fast food & takeaway
Bars serving food
Fast-casual dining
restaurants
Casual dining restaurants
Premium restaurants
2.76 3.38 2.31 3.12 1.46
2.81 3.57 2.35 3.08 1.42
Year1 Year2
16
14
12
10
8
6
4
2
0
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Agefactor
Oldercustomersshowgreaterbrandloyalty,asdolowerincomeconsumersaged25–49.Meanwhile,high-incomecustomersinthe25–49age-bandareapparentlymuchlessbrandloyal.
TheInstaAppetite,PrimeShopperandAffluentCentreStagegroupsspendtheirmoneywithmorebrandsthantheindustryaverage.TheInstaAppetitesegmentappearstobetheleastbrandloyal,havingincreasedtheaveragenumberofbrandsitpurchasesfrombymorethan11.2%inthepastyear.
Operatorswillclearlyneedtoconsiderwhethertheyhavetherightmenus,pricing,customerserviceandambiencetodriveloyalty,aswellasembracingtheincreasinginfluenceofsocialmediainbuildingaloyalfollowing,encouragingrecommendationsanddealingwithcomplaints.
Lookingforfurtherinsights?
Itisimportantthatrestaurantandbarchainsplantheirpromotionsandrewardschemescarefully,todrivesaleswithouterodingmarginsunnecessarily.
Wecanprovideinsightsoncustomerloyaltyandtimingoftransactions,tohelpyouto:
• compareyourpromotionswithindustrynorms
• evaluatetheimpactofdifferenteventsandexplorethemosteffectivepromotionalopportunities
• evaluatecustomers’seasonalpreference
• matchyourpromotionstocustomeractivitybydayoftheweekandtimeofday.
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Highlights
• Proportionofweekendsalesincreasingslightly
• Weekdaysandweekendsbothshowsalesandtransactiongrowth
• Overallaveragetransactionvaluefallingforalldaysoftheweek
Adetailedlookatthetrendsforspendingandactivitylevelsbydayoftheweekthrowsupafewsurprises.
Unsurprisingly,Saturdaysbringinthehighestvolumeofsales,followedbyFridaysandSundays,butthegapbetweensalesatweekendsandweekdayshaswidenedinyear2.
Bothperiodsoftheweekshowedsalesgrowth,butweekendsalesincreasedby14%,whereasweekdaysaleswereupjust9.9%,perhapssuggestingthatsqueezedconsumersaremoreinclinedtosavetheirmoneyforaweekendtreat.
Intermsoftransactions,againweekendsshowgreatergrowthat19.4%against14%fortherestoftheweek,primarilythankstofastfoodandtakeawayweekendactivityincreasingbymorethanafifthandweekendtransactionsatbarsservingfoodgoingupby27.1%.Overall,theproportionofweekendsalesandtransactionsincreasedby0.9%year-on-yearto38.6%.
Aswouldbeexpected,averagetransactionvalueis25.7%higheratweekends,reaching£18.23,buttheaveragetransactionvaluetrendisdownwardyear-on-yearforbothweekends(4%)andweekdays(5%).
Widening gap between weekday and weekend spending Salesandtransactionsgrowth
Weekdays Weekends
SalesGrowth
TransactionsGrowth
9.9% 14.0%
14.0% 19.4%
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How Barclays Market and Customer Insights can helpTapintoawealthofspendingdata
Doesyourbusinessneedtotailoritsdiningofferingtolocalcustomerdemographics?
Doyouneedlocalareaperformanceanalyticstoinformyouroutletexpansionprogramme?
Areyoulookingtotweakyourseasonalpromotionstobringmorevisitstoyourrestaurantsbyunderstandingyourcustomers’diningbehaviour?
Getinsightsfor
Gainingmarketshare:
• Identifyhowtowinbacklapsedcustomers
• Evaluateyourkeytargetsegmentsandwheretofindthem
• Comparetheperformanceofyourmarketingcampaignsrelativetotheindustry
• Reviewwhetheryourrestaurantlayoutmeetstherequirementsofyourkeycustomersegments.
Managinggrowth:
• Identifythelocationsforyournewoutlets
• Evaluatecustomersegmentsdrivingyourgrowth
• Understandcustomers’diningpreferencetoinformyourrewardstrategy
• Findouttheshareofwalletofyourkey customersegments.
BarclaysMarketandCustomerInsightscanhelpfoodanddrinkoperatorsimprovetheirperformanceandidentifynewgrowthopportunitiesbygivingyouaccesstopowerfulanalysisbasedonbillionsofcustomerdebitandcreditcardtransactionsacrosstheUK.
What we offer Customisedonlinedashboard
Thedashboardcanbetailoredtoyourneedsandenablesyoutomonitortheperformanceofyourbusiness,marketpositionandcustomerbehaviouratanytime.
Consultancy
Youcanaccessadedicatedteamofanalystswhowillprovidecomprehensiveandin-depthinsightstoresolveyourspecificchallenges.
Ourinsightscangiveyouanin-depthunderstandingofconsumerspendingbehaviouronatimelybasis.Wecanhelpyoushapeyourbusinessstrategyandgiveyoutheintelligencetomakemoreinformedbusinessdecisions,basedonfacts,notmodels.
Ourservicesaredesignedtogiveyouinsightsatthefrequency,scaleandlevelofdetailyouneedtomeetyourspecificrequirements.
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• Stronggrowthacrossthesectorbutvaryingfortunesacrossdiningcategories
• Fastfoodandtakeawayscontinuetooutperformfullservicerestaurants
• Lowerprice-pointoutletsdrivinggrowthasconsumersshifttocheaperdiningoptions
• Youngerandmoreaffluentcustomerskeytogrowth
• SalesgrowingfastestoutsideLondon
• Deliveriesdriving26.7%increaseinonlinesales
• Brandloyaltydownascustomersoptformorevariety
• Weekendsalesincreasingatfasterpacethanweekdays.
Report highlights
ForfurtherinformationonhowBarclaysMarketandCustomerInsightscanhelpyou,[email protected]
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About this reportThisreportisbasedontwoyearsofdebitandcreditcardtransactionaldataforBarclayscustomersonly.Thedatarepresentsallcustomerswhomadeatransactionintherestaurantandtakeawaysectorbetween1July2016and30June2018.
Dataseries
• Year1isdefinedas1Jul2016–30Jun2017
• Year2isdefinedas1Jul2017–30Jun2018.
Calendarmonthsareusedinthisreport,whichcouldresultinvariationsthataremainlyduetoseasonalityandthenumberofSaturdayswithinaparticularmonth.
Roundinghasbeenusedinsomeinstancesinthisreportsothedataaddsupto100+/-1%.
TheSouthisdefinedasLondon,SouthEast(England),EastofEnglandandSouthWest(England).
TheNorthisdefinedasNorthWest(England),WestMidlands(England),EastMidlands(England),Yorkshire&TheHumber,Wales,NorthEast(England),ScotlandandNorthernIreland.
Allinsightsarebasedongrosssalesandtransactions.Cashtocardgrowthisnotaccountedforinthisreport.
Somesectionsinthisreportrefertotop-100brandsonly.Inthesecases,top-100brandsaredefinedbysalesinyear2,exclusiveofanyoutliers.
Dataprivacy
BarclaysadherestostrictdataprotectionregulationsandallbankingdatausedbyourMarketandCustomerInsightsteamisanonymous.Wedonotshareanydatathatcanbeusedtoidentifyanyindividualorbusiness.
Datascope
ThediningcategoriesaredefinedusingmerchantcategorycodesandBarclay’scategorisationengine–wehavealsofurtherbrokendowntherestaurantgroupsbybrandprice-pointasmeasuredbyaveragetransactionvalue(ATV):
• fastfoodandtakeaway
• pubsservingfood(couldincludealcohol-onlytransactions)
• fast-casualrestaurants–ATVlessthan£20
• casualdiningrestaurants–ATVbetween£20and£50
• premiumrestaurants–ATVabove£50.
Wealsolookedatthefollowinghigh-levelcategoriesinthisindustryreport:
• fastfoodandtakeaway
• fullservicerestaurants–includingbarsservingfood andrestaurants.
Weincludethefollowingbreakdownsinthisreportforthechannelsinwhichthepaymentwasprocessed:
• online–paymentswhicharemadethroughonlineandtelesaleschannels,themajorityofwhichwillbedeliveries
• offline–transactionsmadeon-premises.
Theviewsexpressedinthisreportaretheviewsofthirdparties,anddonotnecessarilyreflecttheviewsofBarclaysBankPLCnorshouldtheybetakenasstatementsofpolicyorintentofBarclaysBankPLC.BarclaysBankPLCtakesnoresponsibilityfortheveracityofinformationcontainedinthird-partynarrativeandnowarrantiesorundertakingsofanykind,whetherexpressedorimplied,regardingtheavailabilityorcompletenessoftheinformationgiven.BarclaysBankPLCtakesnoliabilityfortheimpactofanydecisionsmadebasedoninformationcontainedandviewsexpressedinanythird-partyguidesorarticles.
BarclaysBankUKPLC.RegisteredinEngland.RegisteredNo.9740322.RegisteredOffice:1ChurchillPlace,LondonE145HP.
insights.uk.barclays
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