Eating Out in The UK, 2009

Eating
Out in
the UK
2009
A Comprehensive
Analysis of the Informal
Eating Out Market
Eating
Out in
the UK
2009
CONTENTS
Foreword
Executive Summary
By Steve Easterbrook, Chief Executive, McDonalds
Introduction & Background
Market Definition and Segmentation
Chapter 1
Chapter 2
21
Chapter 3
31
Chapter 4
57
Chapter 5
73
Bibliography
88
The Scale of the Informal Eating Out Market
Market History and Evolution
Consumer Insight
Eating Out Mega Trends
The Future of the Informal Eating Out Market
Eating
Out in
the UK
2009
A Comprehensive
Eating Out Market
Foreword by Steve Easterbrook,

Chief Executive, McDonalds
Eating Out in the UK,
2009 is a comprehensive
analysis of the Informal
Eating Out market. The
sector is one of the big
contributors to the UK
economy, but one of the
least understood.
From coffee shops to fast food
restaurants, sandwich bars to pubs,
the eating out market employs 1 in
20 of the countrys workforce and a
top ten industry but its impact on
our lifestyles, economic activity, job
creation and future growth
prospects are rarely considered.
McDonalds sponsored this
independent research from Allegra
Strategies Food Strategy Forum to
do just that, and better understand
current trends and trading
conditions, as well as forecast future
market developments.
The report is the first snapshot of
the impact of the recession on the
market and consumer behaviour. It
reveals that the amount of spending
on eating out under 15 a head has
fallen for the first time in 40 years
contrary to a popular view that the
sector is booming as customers
trade down from more expensive
dining options.
Eating Out in the UK 2009
It also shows that the choices facing

consumers are wider than ever
before as the number of places to
eat out continues to grow despite
the decline in footfall. The majority
of the industry leaders interviewed
for the report predicted that these
toughening conditions will lead to
casualties, cut backs and closures,
putting some of the 1.36m jobs in
the sector at risk.
Through thousands of interviews
with consumers, the report finds
that habits learnt in this recession
will be long-lasting. Only businesses
that can meet the demand for value
and quality in both food and service
will survive and prosper when the
long-term growth in eating out
returns. Excellent service,
innovations that build loyalty, more
choice, lighter options, quality,
provenance and an experience that
cannot be recreated at home these
are all things that customers will
expect and demand without paying
a premium.
The number of people employed in
the sector will also continue to
grow. Customer service is set to
become a more important
differentiator for operators and the
quality of training and
development opportunities offered
to the workforce will be essential in
underpinning this.
As the market expands and

the number of attractive career
opportunities increase, it is
likely well see a wider reappraisal
of attitudes towards working in
the sector.
At McDonalds, weve made massive
investments over the last three
years in our restaurants, our food
and our people and well invest a
further 90 million in 2009 to
ensure we continue to meet these
evolving consumer demands.
The report emphasises that eating
out has become an ingrained part
of life for people in the UK and one
that Government and policymakers
should take notice of. Long thought
of as recession resistant, this myth
about the sector is now exposed.
But whilst the market is in decline,
the sector is not falling as fast as
other industries and there are some
brands doing well despite current
conditions.With retail set to remain
under pressure, the Informal Eating
Out sector will have an important
role to play in helping pull the UK
out of the recession through
growing employment and the
revitalisation of the High Street, and
the market will bounce back.
However, only those businesses that
meet the conditions of the recession
legacy quality, value and a great
experience will shape the future
of the sector.
Only businesses which

can meet the demand for
value and quality in both
food and service will
survive and prosper.
Steve Easterbrook
Eating
Out in
the UK
2009
A Comprehensive
Eating Out Market
Executive Summary
Informal eating out is
worth in excess of 40bn
Informal eating out has become an

ingrained part of life for UK
consumers, who relish the
opportunity to enjoy food and
drink, and dining and social
experiences, that cannot be
recreated at home. This is reflected
in estimated sales of 40.3bn in
2009, equivalent to average
annual spending per household of
1,665
Allegras consumer research shows
that on average, 1 in 9 meals are
eaten out of the home every week,
equivalent to an estimated 148
million meals in 2009
40.3bn equates to 2.1bn spent
at breakfast (5% of the total),
17.1bn at lunch (42%), 16.7bn at
dinner (42%) and 1.4bn at
supper/late night dining (3%).
Both mid-morning and afternoon
snacks account for 3.0bn (8% of
the total)
Consumers will spend on average

12.75 per week or 663 per year on
informal eating out in 2009 this
compares with 4.44 per week or
230 per year in 1989
Over the last 40 years, the Informal
Eating Out market has taken an
increasing share of the total
expenditure by consumers on food
and beverages reaching 22% in
2009. This compares with a 14%
share in 1969
The sector is in the UKs top 10 by
Gross Value Added, and is a major
employer accounting for a
significant share of the 1.36 million
foodservice jobs across cafs,
canteens, catering, pubs and
restaurants equivalent to 5% of
total UK employment
But, for the first time

since it was properly
established, the eating out
market has contracted
The current recession has
dampened consumers short-term
appetite for eating out, and the
market is forecast to decline by
0.5% in 2009
This negative growth is linked
directly to the recession, which is
affecting employment, job
prospects, household income,
consumer confidence and, in turn,
spending on eating out
Last year, 1 in 8 meals were eaten
out of the home. This year, it will be
1 in 9
35% of consumers are eating out
less now than they were a year
ago, while 20% plan to cut back
over the year ahead
Instead, 32% of people are cooking
at home more, assisted by a wealth
of supermarket offers and dine-in
ranges, and driven by a growing
desire to specify the ingredients
they use and eat more healthily
The hardest hit establishments are
those charging over 10 per head
as consumers seek out greater
affordability. This has meant that
casual dining concepts have seen
negative growth while the fast
food segment has been more
buoyant
The sector will bounce

back, and play a key role
in the UK economic
recovery
The market will see a modest
recovery in 2010 with growth of
0.5% - 1.0%
Over the medium-long term, the
established underlying trends of
rising affluence, growing mobility
and more youthful older
consumers will support stronger
growth in eating out. Following an
Olympics boost in 2012, the market
is forecast to reach 47.5bn by 2014
a five year increase of 18%
Over the next five years, an
estimated 3% - 5% increase in
employment is predicted within
the Informal Eating Out sector as
the market expands to cater for
growing demand raising the
prospect of more favourable
perceptions of foodservice career
opportunities
With retail set to remain under
pressure, foodservice operators will
play a greater role in pulling the
economy out of recession through
growing employment. This will
coincide with the revitalisation of
the High Street as a more leisureoriented destination. The pace of
this transition will, however, be
determined by landlords softening
in rental expectations
But the recession will leave

a lasting legacy, and not all
businesses will survive
The future of informal

eating out will be driven
by key mega trends
This recession will mark a watershed

period and lead to a lasting recession
legacy in which consumers demand
better value and an enhanced
experience but they wont be
willing to pay more for it
Healthy eating is a hugely

important consumer trend.
While taste will remain of
paramount importance to
customers when eating out, they
are only going to become more
health conscious
Operators will face greater challenges

to improve profitability than has been
the case over the past decade. It will
be harder to increase prices, and
improved efficiency will be more
important. The marketplace will
become more specialised and
segmented, with successful operators
focusing more on what they are good
at and key points of difference
Informal Eating Out market winners
will be those operators and suppliers
better equipped to tap into
consumers rising demand for better
value, healthier eating, convenience,
authenticity, local sourcing and
added-experience. The best
performing eating out
establishments are forecast to be
those that specialise in fast casual,
healthier, British, Oriental and hot
food-to-go categories
Growing competition will increase
the importance of building customer
loyalty and strengthening consumer
relationships. Foodservice operators
will learn more from grocery retailers
about developing sophisticated
loyalty schemes. However, the battle
for loyalty will be fought on several
fronts, including overall consumer
experience, customer recognition and
alignment with their values
Buying British, seasonality and

authenticity will continue to be
popular trends with consumers
already, 58% of people prefer to
eat food which is sourced from
the UK. Operators will respond to
this with more frequent changes
to menus
Issues around sustainability and
environmental impact will also
rise up the consumer agenda.
More businesses will conduct
environmental and ethical audits
and produce detailed reports on
the progress being made against
a series of key performance
indicators and targets
Eating Out in the UK 2009 4
Introduction & Background
Market Definition
and Segmentation
The Informal Eating
Out market comprises
a wide variety of eating
out establishments and
locations from which
food and beverages are
bought and consumed
out of the home.
This includes informal
restaurants; fast food and
takeaway outlets; coffee shops
and sandwich bars; retail grab &
go and cafs; pubs; and catering
facilities at leisure venues; travel
sites and workplaces.
What this market does not
include is food consumed at
home, food prepared at home
for consumption out of home,
low level snacking and formal
dining. There is clearly a blurry
definition between the
boundary of informal and
formal dining and this border
has been set at an expenditure
per head of 15 and over.
Consequently, the Informal
Eating Out market can be
defined in terms of covering all
eating out meal occasions
involving a transaction with a
spend per person of 15 or less.
The major sub categories of the
Informal Eating Out market are
summarised right:
SUB-CATEGORIES AND DESCRIPTIONS

WITHIN THE INFORMAL EATING OUT MARKET
SUB CATEGORY
INFORMAL
RESTAURANTS
FAST FOOD &
TAKEAWAYS
COFFEE SHOPS,
SANDWICH BARS
AND CAFS
RETAIL GRAB &
GO, CAFS
PUBS
WORKPLACE
LEISURE
TRAVEL
CATEGORY
DESCRIPTION
Restaurant that offers a
sit-down meal in a casual
environment, typically
with waited service
Carluccios, Nandos,
Pizza Hut,Wagamama
Outlets serving food that

can be prepared and
served very quickly, and
without waited service
Burger King, KFC,

McDonalds,Wimpy
Coffee and food-focused

cafs and bars, including
branded and
independently managed
establishments
Costa Coffee, Pret A

Manger, Starbucks,
Subway
Combination of cafs and

grab & go ranges at
assorted retailers,
including c-stores,
department stores, petrol
retailers and
supermarkets
M&S Caf, Sainsburys,

Spar, Tesco,Wild Bean
Caf
Public houses and bars

selling food, including
managed and leased
outlets
Beefeater, Harvester, JD
Wetherspoon, Toby
Carvery
Sit-down and grab & go

facilities in the
workplace, but excluding
vending machines
Assorted contract
caterers, branded
concessions and inhouse catering solutions
Includes locations where

food and beverage
supports the primary
reason to visit, including
shopping centres, theme
parks, sports arenas,
music festivals and
concerts
Assorted contract
caterers, branded
and independent
concessions
Foodservice facilities for

consumers in transit
including prior and
during travel
Little Chef, Roadchef,

Upper Crust,Welcome
Break
Source: Allegra Strategies Analysis, 2009
OPERATOR
EXAMPLES
Research
Background
Substantial research has been conducted in
preparing this study of the UK Informal Eating Out
market. This has comprised four main activities:
SUMMARY OF CONSUMER, INDUSTRY EXECUTIVE
AND MARKET RESEARCH ACTIVITIES
ACTIVITY
CONSUMER
RESEARCH
NOTES
2,000 household telephone interviews,

representative sample, qualitative and
quantitative questions
350 face-to-face indepth interviews in-store in
12 McDonalds stores
45 family eating out diaries, covering visit
purposes, occasions, venues, timings, spend and
likes and dislikes. Diaries maintained for a two
week period, with the sample spread over a two
month period running between May June
2009
DESK
RESEARCH
Analysis and review of existing eating out

market research
Reviews of news articles, trade press, industry
websites and key operator reports and accounts
Synthesis with existing Allegra databases and
reports
FOODSERVICE
INDUSTRY
SENIOR
EXECUTIVE
RESEARCH
INDEPENDENT
OPERATOR
RESEARCH
30 interviews with senior executives across the

foodservice sector, conducted via telephone and
face-to-face
Analysis supported with mining of previous
Allegra data and interview findings
100 interviews with independent

caf/restaurant owners/managers conducted
via online and telephone
Feedback captured on the specific issues and
strategic challenges facing the sizeable UK
independent operator sector
Chapter 1
The Scale of the Informal

Eating Out Market
In This Chapter
The size of the

Informal Eating Out
market by value
The rise of the
market
The make up of the
market
The contribution of
the market to Gross
Value Added
Employment trends
The impact of the
recession
KEY POINTS
The UK Informal Eating Out
market is estimated to be
worth a sizeable 40.3 billion
in 2009
40.3bn equates to 2.1bn
spent at breakfast (5% of the
total), 17.1bn at lunch (42%),
16.7bn at dinner (42%) and
1.4bn at supper/late night
dining (3%). Both mid-morning
and afternoon snacks account
for 3.0bn (8% of the total)
Over the last 40 years, the
Informal Eating Out market
has taken an increasing share
of the total expenditure by
consumers on food and
beverages reaching 22% in
2009. This compares with just
14% in 1969
Consumers will spend on
average 12.75 per week or
663 per year on informal
eating out in 2009 this
compares with 4.44 per week
or 230 per year in 1989
As of March 2009, 1.36 million

people were employed across
the restaurant & caf, pub &
bar and canteen and catering
sector
In 2006, the Informal Eating
Out market contributed 3% to
Gross Value Added this ranks
it as one of the Top 10
industries in terms of
contribution to the UK
economy
An estimated 7.7 billion meals
are eaten out of the home in
2009 equivalent to 148
million meals a week
On average, 1 in 9 meals are
eaten out of the home every
week. In early 2008, the figure
was 1 in 8, reflecting the
impact of the recession
The largest segments of the
Informal Eating Out market in
terms of value are informal
restaurants (27%), pubs (23%),
coffee shops/sandwich bars
(17%) and fast food/takeaway
(11%)
The Size of the

Market by Value
Allegra estimates the
value of the Informal
Eating Out market for the
UK to be 40.3 billion in
2009.
Fig. 1.1 THE VALUE AND ANNUAL GROWTH OF THE INFORMAL EATING
OUT MARKET AT CURRENT PRICES, 2000-2009 - Million
6.60%
This is equivalent to average

annual household spending of
1,665. This valuation assumes a
decline of 0.5% in the Informal
Eating Out market over the period
2008-2009 the first annual
contraction for over 40 years.
This negative growth is linked
directly to the recession, which has
affected consumer confidence,
employment, household income
and, in turn, household spending
on eating out. Despite this recent
decline, the compounded annual
growth rate for the period 20042009 stands at 3.8%.
There has been positive, and
considerable, growth in the
Informal Eating Out market in
the last 40 years. Although there
has been a slight contraction in
2009, growth is expected to
resume in 2010.
5.80%
6.80%
8.30%
5.40%
6.30%
3.80%
4.00%
3.80%
-0.50%
26,327 27,864 29,762 31,359 33,341 34,624 35,931 38,896 40,452 40,250
2000
2001
2002
2003
2004
2005
2006
Market Value
Source: Allegra Strategies Analysis, ONS, 2009
2007
2008
2009
Percentage change year on year
Note: The 0.5% market contraction is based on a number of sources, most notably quarterly
performance insights from Crest, ONS Consumer Trends and assorted company trading results,
as well as from economic forecast data and surveys of outlook prospects from restaurant and
coffee shop business leaders.
Fig. 1.2 THE VALUE OF THE INFORMAL EATING OUT MARKET AT CURRENT
PRICES, 1969-2009 - Million
1,308
2,362
1969
1974
5,302
8,474
13,087
17,618
24,689
33,341
40,452
1979
1984
1989
1994
1999
2004
2009
The 2009 market value of 40.3

billion equates to 22% of
consumers estimated total
expenditure on food and beverage
products of 187 billion and will
claim just over 4% of total
consumer expenditure (ONS, 2009).
Despite a slight dip in 2009, this
share has steadily increased over
the past 40 years. Growth has
been driven by the physical
expansion of foodservice operators,
as well as an increasing number of
consumers, as eating out becomes
an integral part of peoples
lifestyles. The changing landscape
of the High Street, now laden with
coffee shops, sandwich bars and
fast casual concepts,
is testament to the level of
demand by consumers for informal
eating and snacking.
Allegras consumer research shows
that 1 in every 9 meals is eaten out
of the home, which translates to
11% of all meals. In 2008,
consumers ate 1 in every 8 meals
(13%) out of the home each week.
This average figure masks a wide
range of eating out frequencies by
different consumer groups.
Inevitably, it will have been
affected by the recession. Many
people are now opting to cook
more meals from scratch and
entertain guests from their home
and this trend is strengthened by
the increase in foodie culture as
well as the ever present celebrity
chefs in the media.
Fig. 1.3 THE VALUE OF THE INFORMAL EATING OUT MARKET AS A

PERCENTAGE SHARE OF TOTAL FOOD AND DRINK CONSUMED IN AND
OUT OF THE HOME
14% 15% 16% 16% 17% 18% 20% 22% 22%

1969
1974
1979
1984
1989
1994
1999
2004
2009
The Rise of the Informal

Eating Out Market
Expenditure on food out of the home has increased
consistently, with particular acceleration since the
mid-1990s, when growth in the market began to
overtake rises in disposable income. This is clearly
indicated in Figure 1.4 and only serves to illustrate
the important role that eating out now plays in the
modern lifestyle.
Fig. 1.4 COMPARISON OF GROWTH IN INFORMAL EATING OUT
EXPENDITURE AND DISPOSABLE INCOME - Index (100 = 1988)
339
279
261
221
233
172
142
100
75
56
16
31
15
29
1972
1976
172
132
100
72
51
1980
1984
196
1988
1992
1996
Disposable income
2000
2004
2008
Informal Eating Out Market Value
The Make up
of the Market
The Informal Eating Out
market comprises
informal restaurants,
fast food and takeaway
outlets, coffee shops &
sandwich bars, retail
grab & go and cafs,
pubs, the workplace,
leisure venues and travel
locations.
INFORMAL RESTAURANTS:
An informal restaurant offers a
sit-down meal in a casual
atmosphere with a spend per
head of 15 or under. The
popularity of such restaurants is
on the rise. There are numerous
informal concepts expanding
within the market, with brands
such as Gourmet Burger Kitchen,
Nandos and YO! Sushi offering
only a part waited service; as well
as concepts such as Giraffe and
Wagamama, offering full service
but which remain fast,
convenient and well priced.
FAST FOOD AND TAKEAWAY:

The fast food segment offers no
waited service, but the ability to
sit down within the
establishment. Fast food is
usually a burger or a chicken
option. The price tag of a meal at
a fast food restaurant is 3.69
(NPD Group, CREST, 2009) which
is considerably lower than in an
informal restaurant. Leading fast
food brands include McDonalds,
Burger King and KFC.
Takeaway, unlike fast food,
typically does not provide seating
within the establishment.
The majority of takeaway food is

taken home to eat or delivered to
the home. Takeaway in the UK,
for the most part, is Ethnic food
(Chinese/Indian/kebab) or
traditional fish and chips. In the
vast majority of cases, takeaway
outlets are independently run.
COFFEE SHOPS/SANDWICH
BARS/CAFS:
The coffee shop market has seen
considerable growth in recent
years and is a common feature of
any High Street in the UK.
Branded coffee shops such as
Starbucks, Caff Nero and Costa
Coffee have become household
names in the same way that fast
food brands have. As well as the
familiar brands, there are
numerous independent outlets.
The caf culture which has swept
the UK in recent years invites
customers to drink coffee in a
warm and inviting atmosphere.
Like coffee shops, there are
several established sandwich
bars in the UK Subway and
Greggs across the entirety of the
UK, and Pret A Manger and Eat
which are commonplace in the
South East. Unlike coffee shops,
the environment offered in
sandwich bars is more geared
towards grab & go and efficient
order transactions processing.
Traditional cafs are a
longstanding feature of the UK
Informal Eating Out market.
Thought of by many as a place to
get a fry-up and a cup of tea, the
caf still has sentiment with
many older and more traditional
UK consumers.
RETAIL GRAB & GO AND

CAFS:
Supermarkets/convenience
stores/petrol stations offer
consumers food-on-the-move
with sandwiches, drinks and
snacks to choose from. With a
vast number of outlets, they are a
common choice for busy
consumers who want to eat
quickly and cheaply. The grocery
chain with the largest number of
outlets across the UK is Spar
(3,174) with the Co-operative close
behind (3,142) (The Grocer, May
2009).
Many supermarkets and petrol
stations, as well as department
stores, also offer cafs as a means
to increase dwell time and
capture additional spending from
their customers. A few examples
include M&S Caf, Debenhams
Style Caf, House of Frasers Caf
Zest and BPs Wild Bean Caf.
PUBS:
The total number of pubs in the
UK is estimated at 57,500 (British
Beer and Pub Association). A
growing share of pubs offer food,
something which has become
increasingly important since the
introduction of the Smoking B-an
in 2007 and its impact on alcohol
sales. Ongoing closures of pubs
have brought into question the
longevity of the pub in future
years. However, in terms of outlet
numbers, the pub remains one of
the largest contributors to the
THE WORKPLACE:
TRAVEL:
Many larger employers provide

catering services for their staff
frequently heavily subsidised,
where the consumer pays a
nominal amount for a sizeable
meal. Certainly with many large
organisations, the provision of
food will be by contract caterers.
Four of the largest in the UK are
Compass plc, Sodexo, Aramark
and Elior.
Motorway Service Areas provide

motorists with fuel, foodservice
and retail outlets. The three
largest operators are Moto,
Welcome Break and Roadchef.
These providers have partnered
with leading High Street brands,
such as McDonalds, Costa and
Marks and Spencer, but also
provide their own brand catering
offer. Other roadside restaurants
include Little Chef as well as
numerous independents.
Fig. 1.5 SEGMENTAL SHARE OF THE
INFORMAL EATING OUT

MARKET BY VALUE, 2009
LEISURE:
Leisure refers to locations where
food is not the primary reason for
visit but where there is food
available. Examples include
shopping centres, shopping parks,
theme parks, sports arenas, music
festivals and concerts. Depending
upon the location, food can vary
from branded outlets to
independent kiosks.
Leisure (1.2bn) 3%
Foodservice is also present within

train stations and airports as well
as aboard trains and planes. Again,
there are a scattering of brands
within such locations as well as
independently owned
establishments.
Of these market segments, informal
restaurants (27%), pubs (23%) and
coffee shops/sandwich bars (17%)
take the largest share of the market
by value.
Travel Related (0.6bn) 1%

Workplace (3.0bn) 7%
Retail Grab & Go and Cafs (4.4bn) 11%
fast food and Takeaway (Out of Home Only) (4.3bn) 11%
Coffee Shops/Sandwich Bars/Cafs (6.7bn) 17%
Pubs (9.2bn) 23%
Informal Restaurants (10.9bn) 27%
Source: Allegra Strategies Research and Analysis, 2009
The Size of the Market by Transactions

The total number of
informal meals eaten out
of the home in 2009 is
estimated at 7.7 billion.
Industry interviews reveal that

transaction numbers have held up
reasonably well in the recession.
Many operators have, in this
downturn, fought to hold onto their
volumes and market share, choosing
to sacrifice their margins instead.
The relative strength in volume
numbers will help to ensure the
Informal Eating Out market
continues to expand in future years.
Coffee shops/sandwich bars and
cafs has the highest number of
transactions with 1.5 billion. This is
followed by fast food and takeaway
and informal restaurants, each with
1.3 billion transactions.
11
Fig. 1.6 SEGMENTAL SHARE OF THE INFORMAL EATING OUT MARKET BY

NUMBER OF TRANSACTIONS, 2009
19% 17% 17% 16% 14% 12% 5%

Coffee/Shops Informal
/Sandwich Restaurants
Bars/Cafs
Fast Food
and
Takeaway
Pubs
Retail Grab
Go and
Cafs
Workplace
Travel and
Leisure
Note: There is no double counting here. The travel and leisure segment as well as the workplace
have a lower number of transactions largely because many of the foodservice operators within
these sites are brands and have been counted within their relevant segments.
The Size of the Market

by Outlet Numbers
Outlet numbers across
the entire Informal Eating
Out marketplace stand at
an estimated 250,500 in
mid 2009. While in
overall terms this figure
is little changed from
2008, this masks a
modest increase in the
numbers of coffee shops,
sandwich bars & cafs,
offsetting the decline in
the numbers of pubs.
Coffee shops have benefited from
growing demand for speciality
coffee beverages and rising
appreciation of caf culture.
Indeed, for many, the coffee shop
has become a third space
destination (i.e. preferred place
outside the home and the
workplace), usurping the pub in
the process. Pubs continue to be
challenged on several fronts not
least declining alcohol sales,
stiffening off-trade competition
from the supermarkets, highly
leveraged parent businesses and
the fallout from the Smoking Ban.
This is resulting in significant
closures. Closures have been
estimated at 35 a week in 2009,
with numbers down by over 4,000
since 2005, with smaller pubs
with limited food offerings most
heavily impacted.
The largest contribution to the

total outlet count is derived from
the number of workplace facilities,
with the estimated total of 88,600
equating to a 35% share. This
includes workplace canteen and
caf units across business and
industry, education and healthcare
sites, many of which are heavily
subsidised and also cater to a
consumer base outside the scope
of this market definition, not least
school children and the infirm.
These points help to explain the
relatively low market share by
value in comparison.
A key feature of this market is the
importance of lunchtime, and this
helps to account for significant
grab & go purchasing activity.
Convenience-led retail outlets,
including convenience stores,
petrol forecourts and
supermarkets, capture a significant
share of this expenditure,
particularly in larger urban areas
with high white collar working
populations. Several retailers, not
least Marks and Spencer and the
leading supermarket chains, have
also blurred the retail/foodservice
boundaries by incorporating cafs
and hot food-to-go counters.
Allegra estimates the number of

independent outlets in 2009 to be
108,400 43% of the total number
of outlets. The mix between
branded formats and independents
varies greatly within the different
segments of the Informal Eating
Out market. For example, within
the workplace, the provision of food
and beverages is largely through
contract caterers. As a result, the
proportion of independents is only
a small percentage. Within the
informal restaurant, caf and
takeaway segments, however, the
number of independents far
exceeds the brands. Relatively low
capital investment and limited
dedicated skill requirements result
in independents accounting for
broadly four-fifths of the fast food
and takeaway and the informal
restaurant segments.
Fig. 1.7 SEGMENTAL SHARE OF THE
INFORMAL EATING OUT

MARKET BY OUTLET
NUMBERS, MID YEAR 2009
Travel Related (4,744) 2%

Leisure (15,678) 6%
Coffee Shops/Sandwich Bars/Cafs (23,338) 9%
Retail Grab & Go and Cafs (27,276) 11%
Informal Restaurants (26,656) 11%
fast food and Takeaway (30,918) 12%
Pubs (33,247) 13%
Workplace (88,609) 35%
The Contribution of the Informal Eating

Out Market to Gross Value Added (GVA)
Gross Value Added,
introduced by the ONS
in 2005, measures the
contribution to the
economy of each
individual producer,
industry or sector in the
United Kingdom, and is
one of the key economic
indicators used for
measuring the
performance of a sector.
GVA is used in the
estimation of Gross
Domestic Product (GDP).
The last available data for total GVA
for the UK was in 2006 and was
1,177bn. The Informal Eating Out
market as a proportion of GVA in
2006 was 3.0% one of the top 10
contributors. Similar sized
industries include Recreational
Services and Computer Services.
The largest contributors to GVA in
2006 were Letting of Dwellings,
contributing 7.2%, Construction
with 6.3% and Education with 5.9%.
Table 1.1 TOP TEN CONTRIBUTORS TO GROSS VALUE ADDED, 2006
RANK INDUSTRY
1
2
3
4
5
6
7
8
9
10
LETTING OF DWELLINGS
CONSTRUCTION
EDUCATION
RETAIL DISTRIBUTION
PUBLIC ADMINISTRATION AND DEFENCE

HEALTH AND VETERINARY SERVICES
BANKING AND FINANCE
WHOLESALE DISTRIBUTION
OTHER BUSINESS SERVICES
THE INFORMAL EATING OUT MARKET
13
GROSS VALUE
ADDED AT BASIC
PRICES (BN)
84.8
74.0
69.3
65.2
63.0
62.1
60.2
45.9
42.1
35.9
The Impact of the

Recession
The recession will lead to a number of

casualties and portfolio rationalisation
by weaker operators, as well as to
several who might survive in the shortterm, but for whom this is a mere stay of
execution.
Unlike previous periods

of economic decline, this
recession has affected
individuals across all
socioeconomic grades
most notable is the
adverse affect it has had
on white collar workers.
Managing Director, J D Wetherspoon
As a result, the sheer volume of

those impacted by the recession is
greater than in previous recessions.
Largely seen as discretionary
spending, eating out is one aspect
where consumers are likely to cut
back during a recession as many
consumers have reduced
disposable income and/or concerns
over their job security.
John Hutson
The recession has elevated

consciousness around value and
consumers are now much more savvy
around deals.
Damian Dixon
Commercial Manager, Marks and Spencer
Fig. 1.8 RESPONDENTS WHO ARE VISITING EATING OUT ESTABLISHMENTS

LESS FREQUENTLY SPLIT BY TYPICAL SPEND PER HEAD
19%
16%
32%
41%
Visit places
charging less than
5 per head
Visit places
charging 5-10
per head
Visit places
charging 10-15
per head
Visit places
charging more than
15 per head
Source: Allegra Strategies Analysis, Consumer Research, 2009
Allegras consumer research

highlights that people are eating
out less across the board whether
sacrificing a coffee in the morning
or visiting restaurants less
frequently. Allegras consumer
research reveals that, although
consumers are eating out less
across all establishment types, the
hardest hit establishments have
been those charging over 10, with
a far larger percentage eating out
less in these establishments than
in those charging less than 10.
The inference is that informal
dining is relatively well placed as
establishments are frequently able
to offer consumers good value for
their money, at keen price points
something which is of prime
importance to consumers during a
recession when disposable money
is limited.
Looking more closely at the impact

of the recession on a quarterly
basis and by market segment, it is
interesting to see how Ethnic and
Casual Dining categories have been
the hardest hit. Both operate at
relative high overall transaction
values, whereas more affordable
price points exist within the fast
food Burger segment. In addition,
there is a strong brand presence
here and leading chains benefit
from significant consumer trust
and higher marketing budgets.
Fig. 1.9 QUARTERLY YEAR ON YEAR GROWTH IN SPEND IN SELECTED

INFORMAL MARKET CATEGORIES, Q2 07 Q1 09
9.0%
8.6%
6.4%
6.2%
7.7%
4.7%
3.4%
1.8%
2.3%
0.0%
-1.4%
1.1%
-1.6%
The recession will also likely cause

a slight reduction in the number of
outlets, particularly amongst
independents. Some established,
weaker brands will also suffer and
exit the market, whilst others will
prosper and continue to add more
units to the market. Brands
expanding include Wetherspoons,
Costa Coffee, Subway and
McDonalds. The closure of
underperforming outlets, however,
may not all be bad news. New
space on the High Street, as well as
falling property prices, will provide
opportunities for new entrants and
the fitter to expand. Allegras
expectation therefore, is that the
overall outlet count will not be
permanently reduced as a
consequence of the recession.
An encouraging message also
emerges from Allegras restaurant
industry executive research during
mid 2009. The research indicates
that, whilst levels of concern
amongst the industry over the
economic environment in the last
eight months are still relatively
high, they are decreasing. This is
highlighted in Figure 1.10 and
suggests the economy is moving
beyond the worst of the recession.
15
-4.1%
-6.9%
-8.3%
Q207 Q208 Q307 Q308 Q407 Q408 Q108 Q409

Source: Allegra Strategies Analysis, NPD Group, CREST data, 2009
Burger
Sandwich and Coffee
Casual Dining
Ethnic
Note: Values sourced from CREST data. There are specific definitions in the way the market is
assessed: Burger refers to fast food hamburger and chicken; Ethnic refers to takeaway ethnic
food (Chinese, Indian, etc.);Sandwich and Coffee refers to coffee shops, cafs and ice cream shops;
and Casual Dining refers to a sit down but informal meal.
Fig. 1.10 LEVEL OF CONCERN WITH CURRENT ECONOMIC

CLIMATE, 2009 VS. 2008
15% 11%
51% 43%
31% 37%
Highly Concerned
Concerned
Slightly Concerned
Source: Allegra Strategies Analysis, Industry Research, 2009
Sept 08
May 09
3%
9%
Not Concerned
Employment Statistics
in the UK
As of March 2009, 1.36
million people were
employed across the
restaurant & caf, pub &
bar and canteen &
catering sectors, which
equates to 1 in 20 of the
UK workforce.
Restaurants & cafs comprised the

largest of these segments,
accounting for 46% of the total
numbers employed. The impact of
the current recession is evident in
the 2009 figures with the
restaurant & caf segment down
1.3% and the pubs & bars subcategory falling by 2.3%. However,
the longer-term decline in the pub
sector is also illustrated with
employment numbers having fallen
by 57,000 from their peak in 2005.
With 29.1 million people employed

in total in the UK in March 2009,
the sector accounts for 4.7% of the
workforce. This compares with the
retail sector which accounts for
10.8% of the workforce.
Numbers employed within the

restaurant and caf market
segment have increased steadily
since the mid 1990s, though growth
has slowed in recent years. The fall
in employment from 2005 onwards
can be attributed to the fall in the
number of pubs which has
dwindled in recent years.
Employment in restaurants and
cafs has only started to fall since
2008 and is a result of weakened
economic conditions.
494.1
243.7
505.6
616.3
626.2
242.9
526.7
622.2
226.6
543
616.2
243.7
550.9
596.9
259.1
548.3
583.4
271
523.4
559.6
266.3?
521.3
529.6
257.9
509.7
484.1
251
534.7
233.8
483.8
Fig. 1.11 TOTAL EMPLOYMENT IN THE RESTAURANT & CAF, PUB & BAR AND CANTEEN & CATERING SECTORS,
MAR. 2000 MAR. 2009
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Restaurants & Cafs
Pubs & Bars
Canteens & Catering
Fig. 1.12 SHARE OF TOTAL EMPLOYMENT WITHIN RESTAURANTS & CAFS BY

EMPLOYMENT SIZE BAND
54% 22% 13% 8%

1-4
5-9
10-19
17 Eating Out in the UK 2009
20-49
2% 0%
0%
50-99 100-249 250+
Figure 1.12 illustrates that the

majority of people employed
within the restaurant and caf
sector falls within the smallest
establishment sizes those which
employ 1-4 people. This serves to
highlight the importance of
independents and smaller
establishments within the
marketplace.
Looked at by gender split, and
concentrating purely on the largest
sector restaurants & cafs, it is
interesting to note the balancing
trend that has occurred over the
past decade or so. While there are
still more females than men
employed in the sector, the
difference is by no means as
marked as was the case in the
mid-1990s. This reflects a
combination of factors, including
females taking on a wider variety
of job roles, relatively slower
growth in part-time positions
than full-time, and males
becoming more attracted to the
career opportunities.
Fig. 1.13 GENDER SHARE OF TOTAL EMPLOYMENT IN THE RESTAURANT AND CAF SECTOR, MARCH 1996 MARCH 2009
69.5%
66.5%
57.1%
60.1%
42.5%
57.4%
57.3%
54.4%
53.5%
54.4%
53.9%
52.4%
50.5%
52.8%
52.7%
45%
46.5%
45.6%
46.1%
47.6%
49.1%
47.2%
47.3%
24,689
33,341
2006
2007
42.8%
42.7%
13,067
17,618
24,689
33,341
2000
2001
2002
2003
39.9%
30.5%
1996
31.5%
1997
1998
1999
40,250
2004
2005
Male
40,250
2008
2009
Female
Fig. 1.14 PART-TIME AND FULL-TIME SHARE OF TOTAL EMPLOYMENT IN THE RESTAURANT AND CAF SECTOR,
MARCH 1996 MARCH 2009
60.5%
39.5%
1996
58.7%
41.3%
1997
61.3%
38.7%
1998
61.5%
38.5%
1999
63.6%
60.9%
56.5%
59.5%
59.9%
56.5%
55%
53.8%
53.6%
52.8%
43.5%
40.5%
40.1%
43.2%
45.1%
48.1%
48.4%
47.2%
24,689
33,341
2006
2007
36.4%
39.1%
13,067
17,618
24,689
33,341
2000
2001
2002
2003
40,250
2004
2005
Part Time
40,250
2008
2009
Full Time
In a similar fashion to the gender split, there has also been a process of
equalisation within the part-time and full-time roles within restaurants
& cafs. This does not reflect a decline in the number of part-time jobs
over the 1996-2009 period, merely that they have not kept pace with the
increase in full-time positions. Part-time jobs have increased by 82,000 to
reach 326,000, whereas full-time positions have grown by 133,000 to
stand at 292,000 in March 2009.
Staff Turnover and Retention

within the Industry
By industry sector, the
hotel, catering and leisure
industry has the highest
turnover rate 41% in
2007 though more
recent figures are
expected to show a slight
lowering (CIPD, 2008,
Recruitment Retention and
Turnover Report).
High employee turnover within the
hospitality industry is partly
attributable to the constant flow of
students working part-time in pubs,
bars and restaurants frequently
these are first-time jobs. Two thirds
of workers within the hospitality
industry have been in their job for
less than two years (Survey, The
Buzz, 2008).
In a 2008 survey (CIPD), common
reasons cited for leaving a job
included: A change of career,
promotion outside of the
organisation, level of pay, and a lack
of career development
opportunities.
The challenge for the foodservice

sector is to devise a strategy fit to
retain staff on a longer-term basis.
This is increasingly difficult as
career paths, particularly among
young workers, are getting more
fluid with the notion of long-term
loyalty to a company at risk of
dying out.
The recession, however, will have
had a positive impact on the
recruitment and retention of staff.
With a greater number of high
calibre candidates looking for work,
the foodservice industry will be able
to entice some of these candidates
into the sector. The necessity for
companies within the industry to
work on training and career
progression will still remain in order
to retain these individuals beyond
the economic downturn.
Chapter 2
Market History
and Evolution
In This Chapter
Market history
and evolution
1960s to today
Case study 1
More mobile
consumers
Case study 2
Eating out
development focus
on Coventry
Case study 3
Timeline of UK
openings of selected
Informal Eating Out
brands
KEY POINTS
Towards the end of the 1900s,

eating out became
significantly more affordable
and accessible to all consumers
The emergence of the Informal
Eating Out market is directly
linked to increasing affluence,
rising mobility and foreign
travel, and the growth in
branded restaurant concepts
The absence in Britain of a
strong indigenous food culture,
allied with its multi-cultural
societal fabric, has enabled a
rich diversity of cuisine types
to flourish and resulted in a
truly multi-national Informal
Eating Out market
A potted history...
-1960s - New social freedoms
and eating out concepts
- 1970s - Tentative times for
Informal Eating Out
- 1980s - New faster food
fashions
- 1990s - The emergence of
fast casual dining
- 2000s - Caf culture takes
centre stage
The eating out

market has
changed. When
was the last time
you put a suit on
to eat out?
Stephen Clifford
Marketing Controller, Brake Bros
There is now
much greater
choice and higher
quality than ever
before. Brands
have become
much more evident
with a stronger
emphasis on
freshness and
innovation. And
consumers have
become far more
selective and
demanding.
Ewan Venters
Food and Catering Director,

Selfridges
1960s New Freedoms

and Eating Out Concepts
A period of significant
social change, with the
formality and social
constraints of previous
decades replaced by
greater acceptance and
confidence in individual
expression
First openings of
PizzaExpress and
Kentucky Fried Chicken
in 1965 signal the
emergence of the
Informal Eating Out
market
Widening of British food
tastes boosted by the
introduction of package
holidays and expansion
of Indian restaurants
and takeaways with the
growth in migrants from
the Indian sub-continent
In one sense, the origins of
informal eating in the UK are
centuries old and can be traced
back to the growth in trade and
commerce that accompanied the
establishment of many new
settlements and towns during the
Roman occupation of c.50-400AD!
However, in its contemporary
sense, the Informal Eating Out
market really began to take shape
in the 1960s. The Swinging Sixties
was a decade of revolution against
the conservatism and social
conformity that characterised the
austerity and rationing of post-war
1950s. The 1960s were far more
prosperous years and hosted
several notable foodservice

developments as well as
significant cultural changes.
chance for many people to have

affordable travel abroad,
particularly to Spain and Greece.
Re-introducing Italian inspiration,

the pizzeria arrived complete with
the first purpose-built pizza oven
in the UK, with the original
PizzaExpress opening in London in
1965. This year also saw American
fast food influences taking root,
with the establishment of the first
Kentucky Fried Chicken. At this
time, Wimpy was in the vanguard
of bringing burgers to Britons, or
Londoners at least, with nine bars
on Oxford Street by the end of the
decade. Also influential in making
eating out more widely accessible
and, in contributing to it becoming
more of a leisure activity, was the
emergence of bistros. These
eateries provided casual
environments and offered an
assortment of mainly French
country options, including garlic
mushrooms, ratatouille, moules
and pt.
The growing British economy and

an enduring legacy of post-war
reconstruction led to labour
shortages and resulted in
significant in-bound migration.
The UKs largest wave of Indian
migrants arrived in the late 1950s
and 1960s, quickly introducing
spicier food items to consumers
eating repertoires. In the process,
Indian takeaways and restaurants
became familiar fixtures on shop
parades across many major towns
and cities. They joined the
emerging Chinese takeaway sector
and provided welcome new
alternatives to the substantial
numbers of traditional fish & chip
shops.
The 1960s also saw Britons food

tastes being expanded by the
growth in package holidays. These
relatively cheap combinations of
flights, transfers and
accommodation provided the first
Despite the emerging

liberalisation, pubs remained a
bastion of masculinity with
attendance viewed by generations
of men as sacrosanct. Food was
very much secondary to drink, with
wives expected to have meals
ready at home particularly in
more industrial, working class
areas outside London.
1970s Tentative times

for Informal Eating Out
Major economic scars
from the fall-out of the
Oil Crisis in 1973 with
high unemployment
and inflation
Growth in eating at
home boosted by rising
household ownership of
domestic appliances
Popularity of
steakhouse pub chains
In many respects, growth in eating
out activity was on hold during the
1970s. The first half of the decade
was a period of significant
economic and political uncertainty,
with oil price shocks, power cuts, a
major recession and substantial
unemployment. However, while
conditions improved as the decade
progressed, eating out appetites
were also dampened by major
advances in electrical appliances
that improved the quality of
domestic life. The penetration of
refrigerators, freezers and colour
TVs among UK households grew
strongly by 1978, more than 90%
of households owned a fridge and
over 40% possessed a deep freeze
or fridge freezer.
Growing TV viewing made
household names of cooks Robert
Carrier, Fanny Cradock and Graham
(Galloping Gourmet) Kerr. They
encouraged more consumers to be
more experimental and confident
in the kitchen, and provided a fillip
to in-home entertaining. The
leading grocery chains also
supported improved dining-in,
with initial moves towards opening
larger superstores and offering far
more varied assortments, including
23
new, ready-prepared frozen foods

such as lasagne, gateaux and boilin-the-bag fish.
Pubs, in particular, benefited from
the convenience advantages of
frozen food and many introduced
a selection of chicken, sausages,
burgers or scampi, served with
chips in a basket. The solid
tradition of the roast dinner also
became part of the eating out
experience. It became the
centrepiece of carvery-style
operations, with the roast meat
carved from the joint at the
customers request. Pub chain
steakhouses also emerged such
as the Berni Inn and Beefeater
brands continuing the
traditional British fondness
towards relatively plainly cooked
meat. Indeed, red meat was
dished up on a regular basis, with
the average person consuming
450g per week double the
consumption level of today.
Red meat-eaters were also

delighted with the arrival of
McDonalds into the UK in 1974,
with Burger King following three
years later. As with previous new
chain openings, London was
targeted for market entry. Together
with Pizza Hut also making its
debut, the informal element of
eating out was being
strengthened.
The 1970s also saw the introduction
of equal pay for women and better
education regarding contraception,
resulting in more females enjoying
improved career prospects. The
enhanced spending power, and
reduced time for at-home meal
preparation, would become an
increasingly important Informal
Eating Out market growth dynamic.
Indeed, Figure 2.1, highlights how
female employment has increased
strongly since the early 1970s, rising
by 4.3 million or 49% over the 19722008 period.
Fig. 2.1 GROWTH IN FEMALE EMPLOYMENT AND SHARE OF TOTAL

EMPLOYEES NUMBERS. UK 1972-2008
37.1%
38.5%
40.1%
41.7%
43.1%
44.9% 45.5% 45.7%
45.9%
46.0%
9,107
9,537
10,052
10,124
11,247
11,478
11,868
12,573
13,080
13,549
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
37.1%
Note: Includes part- and full-time employment

Source: Allegra Strategic Analysis, ONS, 2009
Share of total %
Female Employment in 000s
1980s
New faster food fashions
Period of strong
economic growth and
rising materialism
Emergence of more
sophisticated
sandwiches both from
Marks and Spencer and
first Pret A Manger
store opening
Rapidly expanding fast
food segment
The 1980s split opinion to some it
was a decade of greed and
conspicuous consumption, to
others, it was a period of
entrepreneurship and possibility. A
growing divide certainly emerged
between the rich and poor, with
better off families paying less tax
and enjoying the growing
abundance of new food options
including nouvelle cuisine.
What is clear is that the eighties
marked a period when several key
societal trends that we recognise
today became evident not least
the emergence of working women,
falling household sizes and the
rising importance of convenience
and healthy eating. These factors
contributed to the 1980s being
characterised by two things the
microwave and the sandwich.
More specifically, Marks and
Spencer began selling its popular
sandwiches and Prawn &
Mayonnaise was quickly
established as the best seller.
Taking inspiration, small and
independent bakers sought some
competitive protection from the
burgeoning supermarket multiples
and started offering more prepared

options to appeal to the growing
take away market. Greggs
expanded its store portfolio, while
Pret A Manger opened for business
in 1986. The fast food operators
also moved to embrace healthier
developments. Wimpy was the
first to introduce a vegetarian
option with its Spicy Beanburger,
while McDonalds became the first
chain to provide nutritional
information for the benefit of
consumers.
In terms of leading restaurant
brands, back in 1983, the largest
chain was operated by Little Chef,
with over 310 outlets. This was
followed by Berni Steak Houses
and Cavalier Steak Bars, as Britons
love affair with red meat endured.
However, by the end of the decade,
Little Chef was usurped by
McDonalds, with its growing
coverage of Great Britain nudging
it towards the 400 mark.
Competition in the fast food sector
was also strengthening, both from
the introduction of new products
and entrants. Chicken nuggets and
meal options for kids were added
to menus, with new competitors
emerging in the form of Dominos,
Taco Bell and Wendys. In addition,
and at the lower end of the
culinary spectrum, kebab shops
were given a huge fillip by
comedian Harry Enfields Stavros
character.
While not all new players were to
prove successful, the ground was
being prepared for a new breed of
eating out genre one that
combined fast convenience with a
more sophisticated, yet casual
informality.
1990s The emergence

of Fast Casual dining
Rising social mobility,
household wealth and
living standards
Proliferation and
internationalisation of
fast casual and quick
service dining concepts
Emergence of gastropub segment
The 1980s may have paved the way,
but the 1990s represented a
genuine step change in the
evolution of the Informal Eating
Out market. Exciting new branded
concepts emerged, and tried and
trusted brands expanded their
reach significantly. In the process,
eating out became a more routine
part of many more lives.
In particular, the value mid-market
restaurant sector grew
exponentially during the 1990s.
Appealing to a large segment of
consumers looking for something
stylish yet safe, PizzaExpress was
joined by a raft of pizza & pasta
brands, including Ask, Carluccios,
Strada and Zizzi. Opening up new
frontiers was the emergence of the
innovative yet accessible,
Wagamama, which debuted in
1992. Offering non-specific
Oriental food at affordable prices
and with open kitchen practices,
this was an exciting new addition
to the informal scene. And the
same could be said for YO! Sushi.
Opening its first outlet in 1997, YO!
Sushi brought Japanese-inspired
new food and restaurant practices
to the UK.
25
Without question, consumers were

developing more sophisticated
taste buds and demanding spicier
food. In 1992, South African-based,
but Portuguese-inspired, Nandos
began capitalising on this through
its flame-grilled peri-peri chicken
ranges. Nandos also helped to
create a new space in the informal
market with its pay first, but tableserved approach.
The upward trajectory of all things
Asian boosted the opening of a raft
of independent Thai restaurants
and the popularity of Indian food
in the 1990s helped to raise the
profile of Chicken Tikka Masala to
favoured national dish status.
Pubs also caught the Asian bug,
expanding menu options and, in a
number of cases, sub-contracting
out kitchens and converting entire
food assortments over to Thai
cuisine. Indeed, the pub sector
grew strongly during the mid-late
1990s on the back of a burgeoning
catering business. Several smaller
pub chains and independents
raised the bar on their food
standards by joining the pubrestaurant movement with the
term gastro-pubs being
introduced to describe more
upmarket establishments.
Concentrating on higher footfall
urban areas, were a couple of new
entrants to the sandwich sector.
Eat and Subway both opened in
1996 and offered healthier
alternatives within the market
but to different target audiences.
Taking more than a little
inspiration from Pret A Manger, Eat
was also aimed at office workers.
By contrast, US-based Subway
offered more youthful appeal and

introduced a customised sandwich
proposition to the market via its
franchise-based business model.
Also helping to consolidate the
more affordable end of the
informal market were a number of
notable developments within the
coffee shop sector. Starbucks
arrived in the UK via its acquisition
of the Seattle Coffee Company in
1998, while the emerging business
development possibilities did not
go unnoticed by several other
sizeable operators. Whitbread
acquired Costa Coffee in 1995,
Nestl opened its first Caf Nestl
in 1997 and McDonalds purchased
the Aroma chain two years later.
This emerging market segment
was certainly stirring, but few
would have predicted the
phenomenal growth that would
occur in the new Millennium.
2000s Caf culture

takes centre stage
Rapid expansion of
branded coffee shops
and increasingly
pervasive caf culture
Emergence of healthier
quick service chains
and a new
premiumised sector
End of decade recession
reins in consumer
spending and market
expansion
In many ways, it is odd to talk
about the noughties as the time of
the coffee shop as this concept has
existed in the UK in a generic caf
format for much of the previous
century. Moreover, even on a more
tightly defined basis as a venue
specialising in roast and ground
coffee, there was over 1,000
branded coffee shops by 2000.
However, this is to ignore both the
huge growth this market segment
would go on to achieve and also its
profound impact on the broader
Market leaders, Costa Coffee and
Starbucks, both now operate over
700 units alone, and there will be
well over 4,000 branded coffee
shops by 2010. This growth has
been facilitated by coffee shops
expanding across the UK, and in
many ways, usurping the pub as
Britons preferred third space. In
addition to their core stores, the
leading coffee chains have opened
concessions in book stores, garden
centres, department stores and
supermarkets, and developed
express kiosks to trade from

smaller footprints at travel hubs.
Not to be out-done, a host of nonspecialist operators have explored
their own ways to capitalise on
consumers growing demand for
coffee. Marks and Spencer
launched its Caf Revive concept in
2000 and is now the UKs fourth
largest caf operator. Petrol
forecourt specialist, BP, has
developed a chain of over 200 Wild
Bean Cafs, while motorway
services area operator, Welcome
Break, has successfully introduced
its own Coffee Primo brand. In
addition, many pub chains are
fighting back by strengthening
their speciality coffee offers, not
least JD Wetherspoon through its
tie-up with Lavazza, and Greene
King with Coffee Republic.
An important point that many
non-specialist operators are
learning from the leading coffee
chains is that it is not just about
the coffee. The branded chains
have prospered because
fundamentally they are selling an
experience that consumers buy
into. The combination of the
relaxing atmosphere, a carefully
designed in-store environment
and, increasingly, free newspapers
and Wi-Fi, offer a proposition that
simply cannot be re-created at
home and this has been a key
driver behind the strong Informal
Eating Out market growth of
recent years.
Working alongside the market
growth dynamic provided by the
rise of caf culture, has been the
substantial expansion of branded
concepts. The UK store portfolios

of Greggs, McDonalds and Subway
all passed the 1,000 mark during
the noughties and have by no
means reached saturation points.
Providing a useful indicator of the
scale and importance of the
branded chains is the fact that
today, to be a Top 10 operator
within the Informal Eating Out
market, a minimum estate size of
500 outlets is required. As recently
as the early 1980s, 50 would have
been sufficient.
At the same time, it has not all
been plain sailing for branded
operators. A number of players
have come and gone, either
through closure or
takeover/conversion of underperforming businesses. During the
2000s, examples within the caf
sector include Benjys, Madisons
and the phasing out of the Bakers
Oven brand. Previously, and within
quick service restaurants, Arbys,
Happy Eater, Pizzaland, Taco Bell
and Wendys have closed down.
Indeed, it would be misleading to
suggest that the noughties have
just been about the leading
brands. Food culture has
developed appreciably and a host
of green shoots have emerged,
many supported by savvy
marketing and an eagerness to tap
into a variety of established and
emerging consumer trends. Salad
bar concepts, Chopd and Tossed,
are targeting convenience-driven
consumers looking for healthy
options delivered with personality.
This can also be said of Leon and
Snog.
>>>
>>>
Certainly prior to the recession,
premiumisation was driving
margins and putting smiles on
operators across the eating out
sector. It helped the development
of several more indulgent bakeryled concepts, including Baker &
Spice, Le Pain Quotidien and Princi.
Interestingly, these businesses
comprise retail and
foodservice functions. The same

also applies to upmarket eaterie,
Ottolenghi, and to earlier pioneer,
Carluccios.
Indeed, while the noughties have

been characterised by booming
caf culture, they are also very
much about the emergence of a
24/7 society. Consumers are
becoming ever more switched on
and demanding much more on
their own terms and this is an
important marker for how the
market will evolve going forward.
Also significant is that growing

number of operators are offering
consumers increasingly different
propositions across the dayparts
via extensive daily opening hours.
Case study 1
More Mobile Consumers
UK residents have
become increasingly
mobile over the past 50
years
This is evident in greater car
ownership and access to cars,
more people on the road and
spending more time travelling,
and greater numbers of
commuters. All of these factors
have been beneficial and helped
support the rise of the Informal
Eating Out market. This is
through:
Providing greater access for
consumers to a wider choice of
eating out establishments
Fig. 2.2 PERCENTAGE OF ADULTS WITH FULL CAR DRIVING LICENCE,

UK 1975-2006
48%
57%
69%
72%
1975/1976
1985/1986
1995/1996
2005/2006
Source: Allegra Strategies Analysis, Department for Transport, 2009
Fig. 2.3 BILLIONS OF KILOMETRES TRAVELED BY BRITONS WITHIN

GREAT BRITAIN, 1971-2007
Increasing the opportunities for

operators to tap into more out
of home meal occasions
Stimulating demand for
products designed for grazing
on the hoof and dashboard
dining, and boosting use of
drive-thrus
419
495
681
765
817
1971
1981
1991
2001
2007
Source: Allegra Strategies Analysis, ONS Social Trends, 2009
Particularly across the 1970s and

1980s, the proportion of adults
with a full car driving licence
increased strongly, and now
stands at just over 7 out of every
10 adults. Unsurprisingly, car
ownership has also increased, and
now averages 1.14 cars per UK
household.
In addition, there has been

significant growth in the number
and length of journeys being
undertaken by Britons over the
past 40 years. The Office of
National Statistics reports a nigh
on doubling of kilometres
travelled within Britain over the
1971-2007 period. Growing

employment and commuting has
contributed strongly to this, and
it is interesting to note that the
average UK commuter now
spends the equivalent of 26
working days a year commuting.
(Work Wise)
Case study 2
Eating out development

focus on Coventry
Coventry is a relatively
traditional city in
Middle England with a
population of just over
300,000.
While the profile of its population

has taken on a greater Asian
composition, over the past 40
years it has not seen significant
population growth and, as such,
provides a useful mini case study
for more closely exploring how
the assortment of its various
eating out establishments has
changed. Using data sourced
purely from Yellow Pages, it is
interesting to see how various
sub-categories have grown (or
otherwise), since 1978. Key
findings include:
Significantly greater presence
and diversity in takeaways and
restaurants
Growth in cafs and sandwich
shops
Halving in numbers of fish &
chip shops and pubs
Emergence of branded chains
While it is predominantly outside
the out of home scope of this
Informal Eating Out market, the
strongest growth has occurred
with takeaway food shops,
including various ethnic, pizza and
kebab outlets. Significant growth
has also taken place within
restaurants, with this including
contributions from both branded
chains and independents. Indeed,
it is insightful to see the
substantial segmentation of sub-
Table. 2.1 GROWTH IN NUMBER OF EATING ESTABLISHMENTS

BY TYPE, COVENTRY, 19782008
Type of Establishment
Cafs & Sandwich Shops
Fish & Chip Shops

Public Houses
Restaurants
Takeaway Food Shops

TOTAL
Growth
19782008 2008
1978
1988
1998
43
24
29
64
21
61
63
52
31
-30
256
227
219
127
-129
59
93
107
144
85
27
63
124
168
141
446
470
531
534
88
Source: Yellow Pages
categories employed within the

restaurant section of the 2008
Yellow Pages. This now includes:
American, African, Armenian,
Austrian, Bangladeshi, Belgian,
Caribbean, French, Greek, Indian,
Indonesian, Irish, Japanese,
Korean, Kurdish, Lebanese,
Malaysian, Mediterranean,
Mexican, Middle Eastern,
Mongolian, Moroccan, Nepalese,
Polish, Portuguese, Russian,
Scottish, Spanish, Thai, Turkish
and Vietnamese.
Cafs & sandwich bars show
particularly strong growth over
the past decade, which is very
much in keeping with the rise of
caf culture in the UK in general.
This segment is also interesting
from some of the names of subcategories that have been used.
Back in 1978, this included snack
bars, ice cream parlours and milk
bars, descriptions that have
largely disappeared since. Newer
sub-categories have emerged in
the form of internet cafs and
pottery & ceramic cafs.
Unsurprisingly, fish & chip shops
have lost out to the substantial
growth in competition from

other takeaways and restaurants.
The other major loser in this
analysis has been public houses.
Again, this is in line with wider
UK trends, but the magnitude of
the decline within Coventry will
have been greater owing to its
City status, and a heavier skew
towards smaller, beverage-led
establishments.
The expansion in eating out
establishments has also served to
change the retail landscape of
Coventrys central shopping areas
and suburban shop parades. The
retail/foodservice mix has
evolved to include a much
stronger and higher quality
eating out provision, compared
with the more pub dominated
market back in the 1970s. And
with many non-food retailers
struggling and closing, the
expanded foodservice offer is
helping to maintain footfall and
reduce the number of vacant
units. Certainly, within the more
central and higher rental areas,
there is a stronger foodservice
presence, but this is focused
around leading brands.
Case study 3
Timeline of UK Openings
from Selected Informal
Eating Out Brands
The origins of the

modern day Informal
Eating Out market can
be traced back to the
1960s. Pioneers,
Kentucky Fried
Chicken and
PizzaExpress,
introduced new eating
ideas and paved the
way for a host of new
restaurant concepts.
The pace and variety
of openings increased
in the 1990s and this
momentum and
burgeoning
heterogeneity has been
carried through into
the new millenium.
Fig. 2.3 TIMELINE: THE UK DEBUTS OF SELECTED INFORMAL EATING

OUT BRANDS, 1960s-2000s
1960s
New social
freedoms and
pioneering
eating out
concepts define
informal origins
1970s
Difficult
economic times
and more focus
on eating at
home than out
1980s
New fast food
fashions,
including
burgers, ready
meals &
sandwiches
1971
Costa Coffee
1992
Wagamama
2001
Gourmet
Burger Kitchen
1992
Nandos
2004
Chopd
1995
Eat
2004
Leon
1996
Subway
2005
Canteen
1973
Pizza Hut
1980
Wendys
1997
YO! Sushi
2005
Sacred
1965
Kentucky
Fried Chicken
1974
McDonalds
1985
Dominos
1998
Giraffe
2005
Tossed
1965
Pizza Express
1977
Burger King
1986
Pret A Manger
1998
Starbucks
2008
Jamies Italian
1970s
1980s
Source: Allegra Strategies Analysis, Companies, 2009
2000s
Rise of caf
culture and
birth of many
new healthier,
niche and
premium
brands
2001
Apostrophe
1960s
29
1990s
The emergence
of fast casual
dining with
many exciting
new players
1990s
2000s
Chapter 3
Consumer
Insight
In This Chapter
Key motivations and

primary occasions
for eating out
Eating out behaviour

when, where and
how often
The popularity of
different
establishments
Key influences when

choosing somewhere
to eat out
Spend patterns and

affordability
Changing eating out

habits amongst
Britons
The trend in
snacking versus
eating structured
meals
Case studies across

different regions and
age brackets,
including Dining
Diaries
Eating out in the
next 12 months
KEY POINTS
Some 148 million meals are
eaten out of the home every
week in the UK
On average, this equates to 1 in
every 9 meals. Significant
variation lies around this figure
16% of the British public eat
five meals or more out of the
home every week, and 19% eat
no more than one meal a
fortnight
Most people (81%) view eating
out as a treat. However, people
are not just eating out on
special occasions. A high
percentage are doing so for
social reasons, to spend time
with their friends and family
London is the Eating Out
Capital of the UK Londoners,
on average, eat three meals
away from home every week.
People from Northern Ireland
eat out the least, eating on
average less than two meals
out of the home
Lunch is king! 43% of people eat
lunch out of the home at least
once a week
Coffee shops and sandwich bars
are the favourite weekly
destination 34% of consumers
visit one at least once a week
Local pubs are holding their
own rumours of extinction
are grossly exaggerated. The
pub is particularly popular with
young adults and the over 65s.
This illustrates the sentiment

that the pub holds with UK
citizens across the board
Quality and taste of food, above
price, is the key determinant for
consumers looking for value
when eating out
People have been reining in
their eating out 35% of people
are eating out less than they
have been in recent years
compared with just 10% who
are doing so more often
There is a mixed response as to
whether eating out has become
more or less affordable in
recent years consumers err on
the side of believing eating out
to be less affordable but this
can be attributed directly to the
recession and the impact it has
had on consumer confidence
Lower priced establishments
are currently proving popular
74% of diary keepers ate out
in establishments where the
price of their meal / snack was
under 5
The year ahead will be an
improvement on the last 12
months but will remain a
difficult environment for the
eating out market. 20% of
people claim they will be eating
out less over the year ahead
compared with half this
proportion expecting to be
eating out more
Key Motivations and

Primary Occasions for Eating Out
For many, eating out is
an integral part of their
lifestyle. This is a direct
effect of a multitude of
factors, including more
mobile lifestyles, the
ever-widening availability
of food, the social benefits
of eating out and a desire
to broaden palates.
While these factors are
contributing to the long-term
underlying trend of eating out,
people continue to see the
occasion as a treat.
Going out for food

is a treat, I only go
out to eat different
things that I don't
have at home.
Fig. 3.1 EATING OUT AS A TREAT - I regard eating out as a treat

Percent of Respondents
29% 52%
Agree
Strongly
Agree
9%
9%
1%
Neither
Disagree
Disagree
Strongly
Female
16-24, Peterborough
It's a treat because

it breaks the
monotony of cooking
for the day.
Male
35-39, Leicester
In support of the notion that

eating out is a treat, consumers
heavily disagreed with the notion
that a busy lifestyle forced them to
eat out frequently. 81% of people
disagreed that they ate out very
often because of a busy lifestyle
and 78% disagreed to some extent
that they rarely had time to cook
proper meals at home.
The motivation behind consumers

going out to eat is closely linked to
the notion of it being a treat and as
a key part of their social lives. The
most common reasons given by
individuals for eating out of the
home were dining out with friends
(21%), or family (20%) and going
out for a special occasion (21%).
Fig. 3.2 ATTITUDINAL STATEMENTS

78%
81%
9%
12%
8%
11%
I rarely have time

to cook proper
meals at home
I eat out very

often because of
my busy lifestyle
Disagree
Neither
Agree
Source: Allegra Strategies Analysis, Consumer Research,

2009
Fig. 3.3 PRIMARY REASON FOR LAST EATING OUT OCCASION

21% 21% 20% 12% 7%
6%
4%
4%
3%
Dining
Treat/
Dining
Out with Celebration Out with
Friends
Family
Meal
with
Leisure
Quick
Meal-ontheMove
Routine
Meal
Break
from
Work
Dining Meal with

Out with Shopping
Partner
33
1%
1%
Boardroom
meeting
Other
Eating Out Behaviour

In the last 12 months,
35% of consumers have
reduced the extent to
which they are eating
out. 55% are eating out
the same as they were 12
months ago and 10% are
eating out more.
Consumers are also re-considering
their choice of outlet, with 32% of
people visiting places charging 1015 per head less over the last year
and 41% of people reducing their
visits to establishments charging
more than 15 per head.
When individuals are eating out:

Lunch is the meal occasion eaten out of the home most often 42% of
people eat lunch out of the home at least once a week. Comparatively,
31% eat dinner out of the home once a week and 8% breakfast. The
greatest percentage of people 79% seldom or never eat breakfast out
of the home.
Fig. 3.5 FREQUENCY OF MEAL OCCASIONS OUT OF HOME

How often do you eat out?
79%
16%
Fig. 3.4 CHANGES IN EATING HABITS

IN THE LAST 12 MONTHS
Concerning your general
eating habits over the last
year, do you eat out of home
more or less?
(Percent of Respondents)
17%
8%
78%
18%
22%
13%
21%
35%
55%
12%
7%
3%
3%
8%
42%
31%
Breakfast
Lunch
Dinner/Evening
Meal
Never
Less than once a month
One meal per fortnight
At least one meal per week
7%
5%
3%
6%
Late Night/Supper
One meal per month
10%
Eat out of home
Less
Same
More
Lunch is consumed out of the

home by 24% of UK adults at least
twice a week this figure would be
considerably higher if packed
lunches were accounted for. This
proportion compares with 13% of
eating dinner out twice a week or
more.
On average, 1 in 9 meals are eaten
out of the home every week.
However, this encompasses a huge
amount of variation. Some people
are eating out of the home on a
fairly irregular basis for example,
16% eat lunch out less than once a
month. Others will eat five or more
meals a week out of the home. An
estimated 10 million people in the
UK, or 16%, eat five or more meals
out of the home every week.
Lunch dominates, largely because a
sizeable number of workers are out
of the home during their lunch
hour every day. Not all of these
workers will be buying lunch every
day, however 57% typically bring
in a packed lunch at least one day a
week, equating to approximately 17
million people. The workplace
canteen is the second most
popular choice with 24% of people
eating their lunch there.
The most popular evenings for
eating dinner out of the home are
Friday and Saturday nights. Friday
night is more popular with younger
age groups and Saturday night a
more favoured evening for the
early thirties to middle aged (see
Case Study 2).
Fig. 3.6 LUNCH VS. DINNER COMPARISON OF OUT OF HOME

CONSUMPTION BY MORE FREQUENT PARTICIPANTS
How often would you eat out?
9%
1%
5+ Meals per week
15%
12%
2-4 Meals per week
One meal per week
13% 21%
One meal once
per fortnight
Table 3.1 FREQUENCY OF UK CONSUMERS EATING OUT OF HOME BY

MEAL OCCASION
RANK MEAL OCCASION
1
2
3
4
LUNCH
AVERAGE NUMBER OF MEALS EATEN OUT

PER MONTH
DINNER
BREAKFAST
LATE NIGHT SUPPER
4.9
2.8
0.9
0.6
Table 3.2 TOP 10 LUNCH CHOICES AMONGST THE UK WORKING POPULATION

RANK WORKING LUNCH
1
2
3
4
5
=6
8
9
10
BRING IN PACKED LUNCH

EAT IN CANTEEN/CAF
GO TO CAF/SANDWICH BAR
WORK AT HOME
BUY FROM SHOP/SUPERMARKET

GO TO RESTAURANT
GO TO A FAST FOOD OUTLET
1 DONT NORMALLY HAVE LUNCH AT WORK
I GO HOME FOR LUNCH

I GO TO THE PUB
18%
Dinner
=6
35
18%
Lunch
PERCENTAGE
57.4%
23.5%
18.9%
11.9%
7.8%
4.4%
4.4%
4.0%
2.7%
2.4%
Where individuals are eating out:

The most frequently visited establishments, i.e. customers visiting
at least once a week, comprise: coffee shops/cafs/sandwich bars (34%
of consumers); the workplace (17%); general restaurants (16%) and fast
food outlets (15%).
Fig. 3.7 FREQUENCY OF EATING OUT
HOW OFTEN DO YOU EAT OUT IN THE FOLLOWING ESTABLISHMENTS?
19%
22%
22%
25%
47%
50%
79%
89%
11%
23%
17%
26%
12%
26%
13%
14%
15%
17%
15%
16%
11%
8%
1%
2%
1%
16%
14%
34%
15%
14%
17%
2%
2%
1%
6%
General
restaurants
Pub restaurants
Coffee
shops/cafs/
sandwich bars
Fast food outlets
Department
store/
supermarket
cafs
Workplace/
college caf/
canteen
Facilities in
fitness and
leisure centres
Seldom or never
Once every 2-3 months
Once per month
Once per fortnight
At least once per week
Table. 3.3 FREQUENCY OF ESTABLISHMENT VISITS PER WEEK

RANK ESTABLISHMENT TYPE
1
2
3
=4
=4
5
6
8
AV. FREQUENCY OF VISITS PER MONTH
COFFEE SHOP/CAFS/SANDWICH BARS
GENERAL RESTAURANTS
PUB RESTAURANTS
(BRANDED AND INDEPENDENT)
FAST FOOD OUTLETS
WORKPLACE/COLLEGE CAF/CANTEEN
DEPARTMENT STORE/SUPERMARKET CAF
FACILITIES IN FITNESS & LEISURE CENTRES
2.0
1.4
1.3
1.1
1.1
1.0
0.3
Table 3.3 supports what is

expressed in Figure 3.7 by
representing how frequently the
average adult will visit certain
establishments for example,
people will visit a coffee
shop/sandwich bar, on average,
twice a month and will visit a fast
food chain on average once a
month. By contrast, a caf in a
department store or supermarket
is typically visited only once a
month.
Eating Out Consumer Typologies

Consumers vary significantly in the frequency of
their out of home eating patterns from the very
regular diners to those eating out more rarely.
Table 3.4 categorises and describes some of the
key characteristics of different usage segments.
Table 3.4 CONSUMER TYPOLOGIES BY EATING OUT FREQUENCY
5 MEALS OR
MORE PER WEEK
(16%)
GENDER
2-5 MEALS
PER WEEK
(22%)
1-2 MEALS
PER WEEK
(23%)
ONCE A WEEK ONCE A

FORTNIGHT (20%)
ONCE A
FORTNIGHT OR
LESS (19%)
Male, 18-24
Female, 25-34
Female, 35-44
Female, 55-64
Female, 65+
Above average
affluence
Average affluence
Average affluence
Average affluence
Below average
affluence
Eat out more
Eat out more
Eat out less
Eat out less
Eat out less
Eat out more
Eat out less
Eat out less
Eat out less
Eat out less
EATING OUT IS A
TREAT
65% agree
75% agree
84% agree
88% agree
90% agree
POPULAR
ESTABLISHMENTS
Visits all main

establishment types
Coffee shops, cafs,

supermarket cafs,
fast food outlets,
general restaurants
(mainly
independents)
General restaurants,
local pubs
Coffee shops, local

pubs, general
restaurants
(independents
mainly)
General restaurants
(brands mainly), pub
restaurants
Break from work,

everyday meal, quick
meal on the move,
dining with friends
Break from work,

routine meal
Dining with partner,

dining with friends
Special occasion,
dining with family,
dining with friends
Special occasion,
dining with family
DINING OUT
COMPANION(S)
Self, friends
Self, friends
Partner, family
Partner, family
Family
REASONS FOR
VISITING CERTAIN
ESTABLISHMENTS
Been there before,

food quality/taste,
attentive service
Food quality/taste,
wide variety of food
options, good value
on food and drink,
good review in
newspaper
Convenient location,
food quality/taste,
pleasant
environment, clean
restaurant, quick
service
Been there before,

organic/Fairtrade
food, locally sourced
food, wide variety of
food options,
pleasant
environment
Good value on food

and drink, healthy
food options, family
friendly, quick
service,
recommended by
friend/family, special
offers
AFFLUENCE
EATING OUT
CHANGES IN THE
LAST 12 MONTHS
EATING OUT
CHANGES IN THE
NEXT 12 MONTHS
COMMON
REASONS FOR
DINING OUT
The Popularity of
Establishments
Coffee shops, cafs and
sandwich bars dominate
in terms of the frequency
customers visit them.
General restaurants and
pubs are also popular
choices with individuals.
When respondents were asked
which establishments they have
visited in the last three months, the
local pub and the independent
restaurants came out top with the
greatest share. 52% of respondents
have visited their local pub, 44% an
independent restaurant, and 32%
an independent caf.
The strong visiting numbers for
pubs can be attributed to the sheer
number of pub outlets. Allegras
research has indicated that the pub
has sentiment with both young
adults (18-24), and the older
generation (65 and over). The pub
is popular at different times of the
day for these age groups, with the
young adults preferring to visit
pubs in the evening and older
adults during the day. Pubs have
suffered in recent years with a
number of outlets closing.
However, they are clearly
somewhere which can successfully
attract all age groups and all
classes together and close the
bridge between them. The choice
and quality of food in pubs has
been rising for several years and
the Smoking Ban introduced in
2007 further fuelled the need for
pubs to serve food. As a result, the
pub has become a competitor to
many independent restaurants.
Table. 3.5 POPULARITY OF ESTABLISHMENTS

Which eating out establishments have you visited in the last 3 months?
RANK
1
2
3
4
5
6
=7
=7
9
10
11
=12
=12
=12
=12
NAME OF ESTABLISHMENT
PERCENTAGE
LOCAL PUB
OTHER INDEPENDENT RESTAURANTS

INDEPENDENT CAF
52%
44%
32%
MCDONALDS
INDEPENDENT CHINESE RESTAURANT

INDEPENDENT INDIAN RESTAURANT
INDEPENDENT ITALIAN RESTAURANT

COSTA COFFEE
30%
28%
26%
18%
18%
STARBUCKS
15%
KFC
MARKS AND SPENCER (INCL.CAF)
PIZZA HUT
13%
9%
8%
BURGER KING
8%
SUBWAY
8%
CAFF NERO
8%
Of the foodservice brands,

McDonalds emerges as the most
popular establishment with 30% of
people having visited one in the
last three months. Costa Coffee
and Starbucks come second and
third in the ranking of the most
popular branded chains visited by
UK adults.
We generally like to
visit the pub, have a
meal and meet
friends every
week.
Male
45-49, Leicester
Key Influences
Quality and taste of food,
above price, is the key
determinant in the value
equation it is cited as
the leading reason for
choosing a place to eat
out.
Cleanliness is considered to be
nearly as fundamental as food
quality with 71% of people
reporting it as an important aspect
to consider when choosing
somewhere to eat out.
Whilst good value for food and
drinks came out as highly
important amongst many
individuals (38%),
cheap/inexpensive food did not
rank highly as a key factor in
determining where to eat out.
This indicates that while
consumers expect value for money
something which has become a
huge priority since the economic
downturn they are not looking for
cheap food. Many would associate
cheap food with poor quality.
Table. 3.6 IMPORTANT ASPECTS WHEN CHOOSING SOMEWHERE TO EAT OUT

Which of the following are important when choosing a place to eat out?
RANK
1
2
3
4
5
6
7
8
9
=10
=10
12
=13
=13
15
IMPORTANT ASPECT
FOOD QUALITY/TASTE
PERCENTAGE
FOOD SAFETY/CLEANLINESS
NICE ENVIRON./PLEASANT ATMOSPHERE

GOOD VALUE FOR FOOD & DRINKS
ATTENTIVE SERVICE
BEEN THERE BEFORE/PREV. EXPERIENCE

FAMILY FRIENDLY
CONVENIENT LOCATION
WIDE VARIETY OF FOOD OPTIONS
HEALTHY FOOD OPTIONS
RECOMMENDATIONS BY FRIENDS/RELATIVES
QUICK SERVICE
FOOD SOURCED LOCALLY
CHEAP/INEXPENSIVE PRICES
PROMOTION/SPECIAL OFFER/DISCOUNT
73%
71%
41%
38%
30%
23%
21%
20%
19%
18%
18%
14%
11%
11%
9%
Spend Patterns
around Eating Out
The highest spend by individuals on their last eating
out occasion was for a business meeting, with an
average of 26.31 spent on a meal per person, though
this level of spend falls outside the scope of the
Following a business meeting, dining out with a partner also had a high
average price tag, with spend per person of 15.80. By contrast, quick
meals on-the-move had the lowest associated spend, at 5.43.
39
Fig. 3.8 AVERAGE SPEND BY TYPE OF OCCASION
26.32 15.80 14.80 13.43 11.75

Business
Meeting
Dining Out
with
Partner
Dining Out
Treat/
Dining Out
with
Celebration
with
Friends
Family
11.57
9.48
6.77
6.27
5.89
5.43
Meal with
Leisure
Other
Break
from Work
Meal with
Shopping
Routine
Meal
Quick
Meal/Onthe-Move
The Affordability of Eating Out

The largest proportion of
people consider eating
out to be less affordable
than eating at home.
However, this point of view is by
no means unanimous. 30% of
respondents believe that eating
out is now more affordable
compared with eating at home
than it has been in recent years
and 30% believe there has been
no change.
When respondents are divided
between those who have been
affected by the credit crunch and
those who have not, there is a
disparity in views. Unsurprisingly,
48% of people who have been
affected by the credit crunch find
eating out less affordable than
eating at home while 35% of
people who have not been
affected by the credit crunch hold
the same view.
Fig. 3.9 HOW DO YOU THINK THE COST OF EATING OUT VERSUS EATING AT
HOME HAS CHANGED IN RECENT YEARS?
30%
30%
40%
Eating out is now more

affordable
No change
Eating out is now less

affordable
It's cheaper to eat in but it doesn't make

me eat out less. Sometimes I'm too lazy
to cook. Female, 16-24, Peterborough
It's more expensive to eat out but it's a
treat, so we don't mind.
Female, 50-54, Leicester
It is clear that, despite the increase

in the number of discounts and
promotions on offer, people are still
finding it expensive to eat out. The
reality is that eating out is now
relatively cheaper, in part as a result
of these extensive offers and due to
operators squeezing their margins
in order to maintain footfall.
However, with individuals reduced
disposable incomes or perceived
diminishing spending power due to
the recession, and need to be
cautious, people are deeming it
more expensive to eat out.
Fig. 3.10 HOW DO YOU THINK THE

COST OF EATING OUT
VERSUS EATING AT HOME
HAS CHANGED IN RECENT
YEARS?
Analysis by Impact of
Credit Crunch
48%
35%
25%
34%
27%
31%
Affected by credit
crunch
Not affected by
credit crunch
Less affordable
No change
More affordable
Source:
Allegra Strategies Analysis, Consumer Research, 2009
Changing Eating Habits

Affordability is not the only determinant of people
eating out. Factors such as convenience,
socialising and experimenting with new food and
cuisine types all come into play in driving people
to eat out of the home.
I cook at home
about twice a
week, I eat out the
rest of the time as
I am lazy.
Female
16-24, Croydon
Fig. 3.11 CHANGES IN EATING HABITS IN THE LAST 12 MONTHS.

Concerning your general eating habits over the last year, do you...?
7%
34%
35%
22%
32%
21%
24%
33%
61%
52%
55%
59%
59%
65%
64%
59%
32%
14%
10%
18%
9%
15%
12%
9%
Cook from
scratch
Use ready meals

at home
Eat takeaway
meals at home
Visit cafs and

coffee shops
visit fast food

outlets
Eat at pub
restaurants
Visit general
restaurants
Use drivethrough
facilities
Less
Same
More
I went to a local
Chinese. I had
never been there
and wanted to try
a new thing.
Female
35-39, Blackpool
The general trend, as illustrated in Figure 3.11 is that people are cooking
from scratch more than they have been previously (32%) and eating
ready meals (34%) and takeaways less (35%). The trend for coffee shops
is still strong, with 18% of people going to coffee shops more than they
were a year ago and 15% of people eating more at pubs than they were
12 months ago.
Despite these trends in establishments, and as noted in Chapter 1,
individuals over the last 12 months have eaten out less across the board.
This is due to less disposable income and/or fears over their job security.
Aside from this, however, Figure 3.11 shows some interesting patterns in
eating behaviours which are emerging.
.
People are cooking from

scratch more than they
have been previously:
- Many people have moved to cut
back their eating out habits in
light of economic concerns. Rather
than downgrade to restaurants
providing a lower quality
experience, many consumers are
choosing to cook more at home
where they have control over the
ingredients they use
- People are becoming more
adventurous with their food. The
foodie culture has swept the UK
in recent years this, combined
with the trend to eat at friends
houses, encourages individuals to
stay in and re-create the
restaurant feel at home with their
friends
- Healthy eaters are better able to
control what they eat when
cooking at home. For example,
restaurants frequently use high
levels of saturated fat such as
butter in their cooking which can
be avoided when preparing meals
at home
43
We prefer to cook
healthier goods at
home than going
out and spending
so much, sometimes
for low quality
foods.
Female
35-39, Peterborough
My eating habits
have changed
dramatically as
I cook more now.
Female
25-29, Peterborough
34% of people are eating

ready meals less and
35% are eating fewer
takeaway meals at
home. This point is
partly tied in with the
desire to cook more
from scratch at home
but there are other
factors involved. Ready
meals are commonly
regarded as high in salt
and saturated fat. With
the healthy eating
phenomenon now firmly
in place and with little
sign of waning, ready
meals are often seen as
an unhealthy option.
The popularity of coffee
shops and cafs has not
faltered. 77% of people
are eating at coffee
shops and cafs either
the same or more than
they were a year ago.
The coffee shop acts as
a social hub where
people can meet friends,
hold business meetings
or simply relax.
Snacking and Meal Occasions

Fig. 3.12 SNACKING BEHAVIOUR - HOW MANY SNACKS ON A TYPICAL DAY
WOULD YOU HAVE?
55%
17%
2%
26%
1-2 snacks
3-4 snacks
5+ snacks
None, I dont
snack
According to Allegras
research, structured meal
occasions are not being
replaced by regular
snacking.
55% of people have just 1-2 snacks
per day and only 2% have more
than five. This suggests that
Britons are eating snacks in
between their full meals, but not
instead of them. People are also
not skipping many meals over the
two week Dining Diaries, only 6%
of meals were skipped.
Fig. 3.13 STRUCTURED MEAL OCCASIONS VERSUS SNACKING

Eating Diaries:
Percentage of entries for different meal occasions
23% 5% 24% 8% 24% 9%

Breakfast
Mid-morning
snack
Lunch
Midafternoon
snack
Dinner
Late night
snack
Case study 1
Regionality Difference
Perhaps unsurprisingly,
London is the Eating
Out Capital of the UK.
Table. 3.7 AVERAGE SPEND PER PERSON ON THE LAST MEAL OCCASION
BY REGION
RANK
With 621 people for every

restaurant in London, it has the
greatest provision of food outlets.
At the other end of the scale, the
North East has the greatest
number of people per restaurant
1,209. The most recent data
released by the ONS on hotels
and restaurants contribution to
Gross Value Added (GVA) by
region in 2006, also puts London
at the top of the regional list. (ABI,
ONS, 2006).
1
2
3
4
5
6
7
8
9
10
REGION
LONDON
NORTHERN IRELAND
SOUTH WEST
SCOTLAND
SOUTH EAST
EAST
WALES
YORKS & HUMBERSIDE
NORTH WEST
WEST MIDLANDS
NO. OF
RESTAURANTS POPULATION
AND CAFS
(000)
POPULATION
PER
RESTAURANT
12,330
7,653
621
1,995
1,742
891
5,495
5,146
937
5,405
5,117
947
8,625
8,245
956
5,530
5,602
1,013
2,850
2,966
1,041
4,495
5,133
1,142
6,015
6,890
1,145
4,565
5,390
1,181
In terms of spend by region on
11 EAST MIDLANDS
last reported eating out occasion,
3,665
4,361
1,190
Scotland tops the ranking. On
12 NORTH EAST
2,115
2,557
1,209
average, Scots spend 13.91 each
on eating out a week, whereas
frugal consumers from Wales and
the North East of England spend
only 10.92 and 10.62
Table. 3.8 AVERAGE SPEND PER PERSON ON THE LAST MEAL OCCASION
respectively. Londons ranking is
BY REGION
not as high as might be expected.
This reflects the significantly
RANK REGION
AVERAGE SPEND PER PERSON
greater use of cafs and sandwich
bars during lunchtimes.
1
SCOTLAND
13.91
2
3
4
5
6
7
8
9
10
11
12
SOUTH WEST
NORTHERN IRELAND
EAST OF ENGLAND
SOUTH EAST
LONDON
EAST MIDLANDS
YORKSHIRE
NORTH WEST
WEST MIDLANDS
WALES
NORTH EAST
45
13.49
12.76
12.61
12.58
12.39
12.37
12.33
11.38
11.13
10.92
10.62
Fig. 3.14 PERCENTAGE OF PEOPLE EATING LUNCH OUT OF THE HOME AT LEAST ONCE A WEEK BY REGION
49%
48%
46%
45%
43%
42%
41%
41%
41%
40%
39%
37%
London
Northern
Ireland
North
East
South
West
Yorkshire
East
Midlands
Wales
North
West
South
East
Scotland
East of
England
West
Midlands
London has the greatest

lunchtime eating out activity. As
the capital, the number of workers
in London exceeds any other city
within the UK. It is largely the
working populations lunchtime
activity which accounts for the
high number of lunches eaten out
of the home over the course of a
week. The West Midlands has the
lowest out of home lunchtime
activity with 37% of people having

lunch out at least once a week.
Eating out as a social occasion is
popular in the evening. Again,
London comes out on top with the
greatest frequency of dining in the
evening. Perhaps surprisingly, only
19% of people in Northern Ireland
eat dinner out of the home at
least once a week. This lies in
stark contrast with the relatively

high number of people in
Northern Ireland who eat lunch
out of the home at least once a
week. People from the West
Midlands have the exact opposite
behaviour; consuming the fewest
lunches but nearly the greatest
number of dinners out of the
home.
Fig. 3.15 PERCENTAGE OF PEOPLE EATING DINNER OUT OF THE HOME AT LEAST ONCE A WEEK BY REGION
39%
38%
32%
32%
32%
30%
29%
28%
28%
27%
25%
19%
London
West
Midlands
Wales
North
East
East
Midlands
North
West
East of
England
South
East
South
West
Scotland
Yorkshire
Northern
Ireland
Case study 1
Regionality Difference continued

Table. 3.9 EATING OUT TRENDS ACROSS REGIONS
REGION
EAST
MIDLANDS
FREQUENCY
11% of all meals are

eaten out of the home
every week
AVERAGE
SPEND PER
PERSON ON
LAST EATING
OUT OCCASION
12.37
PREFERRED
OUTLETS
Visit local pubs

and fast food
chains frequently
Proportionately,
eat the most
takeaway meals
EAST OF
ENGLAND

every week
12.61
Coffee shops,
general
restaurants
(brands and
independents) are
visited frequently
ATTITUDES,
OPINIONS AND
BEHAVIOUR
Disagree that eating out

establishments must
display nutritional
information
Primary reason for eating

out is to celebrate a special
occasion
Strongly believe that more
information on healthy
eating would encourage
them to eat more healthily
Have cut back their visits
the most to places charging
less than 5 per head
LONDON
Eat out of the home

the most 15% of all
meals are eaten out of
the home every week
12.39
Eat breakfast out of the

home the most often
14% of Londoners eat
breakfast out at least
once a week
Fast food and

general
restaurants are
most regularly
visited
establishments
Most concerned that

healthy food should be
offered in restaurants
Most confident about
eating out more in the next
12 months
Eat dinner out of the

home the most 39%
eat dinner out at least
once a week
NORTH EAST

every week
10.62
Visit coffee shops,

fast food outlets,
supermarket cafs
the most
Highest number who are

cooking from scratch more
Highest percentage of
people agree there arent
enough healthy options at
restaurants
Most strongly in favour of
calorie labelling
Most believe eating out is
now more affordable than it
was a year ago
Have tightened their belts
in the recession. 40% are
visiting places which charge
10-15 less and 57% are
visiting restaurants which
charge over 15 less
REGION
NORTHERN
IRELAND
FREQUENCY
9% of all meals are

every week
AVERAGE
SPEND PER
PERSON ON
LAST EATING
OUT OCCASION
12.76
PREFERRED
OUTLETS
Frequent coffee
shops the most
Have cut back on
visiting fast food
chains the most in
the last year
Eat lunch out the most

66% of people eat
lunch out at least once
a fortnight
Eat dinner out the least
17% eat dinner out at
least once a week
NORTH WEST
SCOTLAND
SOUTH EAST
SOUTH WEST
WALES

every week
11.38

every week
13.91

every week
ATTITUDES,
OPINIONS AND
BEHAVIOUR
Most concerned about

having food which is
sourced locally
Strongly regard eating out
as a treat
Received the best customer
service on their last eating
out occasion
Majority say that

they seldom or
almost never visit
fast food
establishments
Taste of food is the most

important to this region
Visit coffee shops

and fast food
outlets the most
often
Workers most likely to eat in

work canteen
12.58
Highest number
to have visited a
kebab shop in the
last three months
Alongside Yorkshire and the

North East, they most prefer
attentive over fast service

every week
13.49
Most likely to go
out to friends
houses to eat
The most popular reason for

their eating out was to take
a break from work

every week
10.92
Visit pub
restaurants the
most with 39%
visiting a pub at
least once a
fortnight
Workers most likely to bring

in a packed lunch
When choosing a dining

destination, they value
convenient location the
most, are the most likely
region to take
recommendations from
friends and are most
swayed by good reviews in
newspapers
Least worried about healthy

eating when eating out of
the home
More likely to recall the

quality of customer
experience at their dining
establishment as poor or
very poor, compared to any
other region
Eating out in restaurants
charging under 5 far more
Case study 1
Regionality Difference continued

Table. 3.9 EATING OUT TRENDS ACROSS REGIONS - continued
REGION
WEST
MIDLANDS
FREQUENCY

every week
AVERAGE
SPEND PER
PERSON ON
LAST EATING
OUT OCCASION
11.13
Eat a late night supper

the most 10% do so at
least once a week
PREFERRED
OUTLETS
ATTITUDES,
OPINIONS AND
BEHAVIOUR
The most
frequent fast food
visitors 38% visit
an outlet at least
once a fortnight
Place food quality higher on

the agenda when choosing
a restaurant than any other
region
Has the lowest

proportion of high
frequency fast
food visitors
Would most prefer

restaurants to support local
suppliers over any other
ethical initiative
Region most affected by the

credit crunch
Eat lunch out the least

37% eat lunch out at
least once a week
YORKSHIRE

every week
Eat breakfast out the
least 2.8% eat
breakfast out at least
once a week
Eat a late night snack
the least frequently
3% eat a late night
snack at least once a
week
49
12.33
Most concerned that they

receive attentive customer
service over speed of service
Fig. 3.16 EATING OUT TRENDS REGIONAL HIGHLIGHTS
Scots are the least worried

about healthy eating when
eating out of the home
People in the North

East have tightened
their belts in the
recession. 40% are
visiting places which
charge 10-15 less
and 57% are visiting
restaurants which
charge over 15 less
The Northern
Irish are the
most avid coffee
shop users
58% visit one at
least once a
week. They also
eat lunch out the
most and dinner
out the least
People from the

North West the least
visit fast food
establishments
The Welsh visit pub

restaurants the most
with 39% visiting a pub
at least once a fortnight
Proportionately,
people from the
East of England
eat the most
takeaway meals
Most frequent fast food

users are in the West
Midlands - 38% visit a
fast food outlet at least
once a fortnight
Most likely to go out to

friends houses to eat
People from
Yorkshire are
more concerned
with receiving
attentive
customer service
than they are fast
service. They eat
out less than any
other region with
the exception of
Northern Ireland
who eat out the
least
The South East has the

highest number of people to
have visited a kebab shop in
the last three months
People from
the East of
England
have cut
back their
visits to
places
charging
less than 5
Londoners eat out

the most 15% of
their meals are
eaten out of the
home every week.
Londoners are
also the most
likely to eat
breakfast out of
the home
Case study 2
Age differences
Young adults aged

18-24 have the greatest
visiting frequency of
eating out
establishments of any
age group.
The two most popular
destinations for the young are
coffee shops and sandwich bars,
of which 46% of 18-24 year olds
visited at least once a week, and
fast food establishments, which
are visited by 34% at least once a
week. The pub is the most
popular choice with older age
groups. 78% of respondents
aged 55-64 have visited a pub in
the last three months.
Fig. 3.17 FAST FOOD ESTABLISHMENT USERS BY AGE. How often do you eat
out in the following establishments?
Percent of Respondents Analysis by Fast Food Restaurant
and Age
17%
26%
45%
33%
65%
8%
18%
14%
15%
16%
25%
23%
15%
22%
11%
15%
12%
10%
9%
34%
22%
17%
15%
8%
6%
8%
3%
4%
18-24
25-34
35-44
45-54
55-64
65+
8%
Seldom or never
Once every 2-3 months
Once per fortnight
At least once per week
Once per month
79%
Table. 3.10 DIFFERENTIALS IN AGE PROFILES

YOUNG &
ADVENTUROUS
18-24
They have the greatest
eating out frequency
Coffee shops/sandwich
bars is most popular
destination
The younger generation use
ready meals more than
other age groups
They use ready meals more
than other groups
They look for food which is
cheaper
They have busier lifestyles
and less time to cook at
home
Friday night is a popular
night to eat out
YOUNGER
MIDDLE AGED
25-34
This age group eat out less
than the young &
adventurous but more than
the retired-elderly
Their most preferred weekly

destination is the coffee
shop/sandwich bar
Unsurprisingly, this group

care most that the
establishments are family
friendly
Eating out on Saturday
night is more popular with
this age group than eating
out on a Friday night
SENIOR
& ELDERLY
55-65+
They share many of the

same attributes as the
25-34s
They eat out the least
They are the least likely to

dine at pub restaurants
They dine in informal

restaurants the most
This group cook from

scratch the most
OLDER
MIDDLE AGED
25-34
Eating at a convenient
location is more important
to this age group than the
other age groups, but less
important than it is to the
senior generation
They are more concerned
that healthy food options
are available
Workers within this age
group tend to take a packed
lunch for their lunch during
their working day
Pubs are the most popular

destination with this group
Mature adults are looking
for better value as opposed
to inexpensive food
compared with the young
They eat out more for lunch
and less for dinner
Eating habits have changed
the least in the last 12
months
They also expect to eat out
to the same degree in the
next 12 months - far more
so than other groups
The average spend by age group

clearly illustrates who are the
biggest spenders. The 45-54 year
olds who are of working age, often
without dependent children and
arguably with the most expensive
tastes, spend the greatest amount.
Contrary to this, 18-24 year olds,
many of whom are students or in
low paid jobs, spend the least
amount on food when they eat out.
Fig. 3.18 AVERAGE SPEND PER PERSON BY AGE RANGE
8.97
11.77 12.23
14.16
13.00 12.40
18-24
25-34
45-54
55-64
35-44
65+
Case study 3
Dining diaries
45 individuals across
age groups, sociodemographics and
regions within the UK
were asked to fill in a
14 day diary
documenting their
eating patterns
throughout the day,
both in and out of the
home.
These diaries have provided

insight not only into the
frequency with which people eat
out of the home but also on
their overall eating patterns, for
example on whether they are
snacking more, rather than
eating structured meals.
Questions were also asked to
the diary keepers about the
experiences they had when they
ate out of the home, including,
how much money they spent,
whether they had a good overall
experience, and whether or not
they would return.
Table. 3.11 SNAPSHOT OF DINING DIARY
10/06/2009 18:00-20:00
Q3
MEAL OCCASION
Q4
EATING AT HOME/EATING OUT OF HOME
Q5
FOOD TYPE CONSUMED ON OCCASION
Q6
DINNER
ATE OUT OF HOME
MEAT DISH - SALAD
DRINK TYPE CONSUMED ON OCCASION
JUICE
Q7
PERSONS PRESENT
Q8
HOUSEHOLD ROOM LOCATION
Q9
IN FRONT OF TV?
WITH ADULT FAMILY MEMBERS

WITH FRIENDS CHILDREN
WITH FRIENDS
NO ANSWER
NO ANSWER
53
Of the meals eaten out of the home

by the diary keepers, 74% cost 0-5,
11% cost 5-10 and 8% cost 10-15.
Only 8% of meals eaten out of the
home cost the diary keepers more
than 15 per person. This highlights
the trend in purchasing lower
priced meals.
The diary keepers noted what they
enjoyed most and least about their
visits good food, good company
and quick service were all cited as
the best aspects for consumers.
This tallies with the other streams
of research which cited food quality
as the most important factor when
choosing somewhere to eat out.
(See table 3.6).
Fig. 3.20 DINING DIARIES: TOTAL AMOUNT SPENT ON DIFFERENT

EATING OUT OCCASIONS
74%
11%
8%
8%
0-5
5-10
10-15
15 and
over
With regards to diary keepers worst

aspects, 61% said there was no bad
aspect to their visits. This high
number illustrates that the majority
of individuals were satisfied with
their experience overall. Key issues
for consumers included slow service
(a concern for 7% of people), and an
overly expensive meal, noted by 6%.

Poor quality food came relatively far
down on the list. This may be
because people are cautious in their
choice of restaurant, only visiting
places where they have heard or
know the food to be good quality.
Table. 3.12 EATING DIARY: BEST AND WORST ASPECT OF VISIT WHEN EATING OUT
RANK BEST ASPECT OF THE VISIT
1
2
3
4
5
6
7
8
9
10
WORST ASPECT OF THE VISIT
GOOD FOOD
NOTHING
QUICK SERVICE
TOO EXPENSIVE
GOOD COMPANY
CHEAP/INEXPENSIVE
SLOW SERVICE
LACK OF FOOD CHOICE
NOTHING
RUSHED/BUSY
NICE ATMOSPHERE/PLEASANT ENVIRONMENT
POOR QUALITY FOOD
IT WAS A TREAT
OTHER
FAMILY TIME
FOOD THAT I DONT HAVE AT HOME
POOR ATMOSPHERE
TOO NOISY
LACK OF CLEANLINESS
UNFRIENDLY STAFF
Eating Out in the Next 12 Months
(Further information can be found in Chapter 5 The Future of the Informal

Eating Out Market)
To fully understand
consumers future
attitudes towards eating
out, it is useful to
compare how peoples
habits have changed in
the last 12 months with
how they are set to
change in the next year:
55% of people currently say they
eat out about the same as they
did 12 months ago. This compares
with 70% of people who say in
the next year they will eat out
about the same amount as they
do today
35% of people said they are
currently eating out less now
than they were 12 months ago.
This compares with 20% of
people who claim they will eat
out less in the next year than
they do today
The figures highlight that, in the
next year, the majority of people
anticipate they will be eating out
at the same frequency as they do
today. A higher number (20%)
anticipate that they will be eating
out less, and 10% hope to eat out
more. If contrasted with peoples
attitudes today towards eating out,
a relatively positive picture is
painted for the speedy recovery of
the eating out market post
recession, indicating that the worst
is over.
55
Fig. 3.21 EATING OUT IN THE NEXT 12 MONTHS

Do you think you will be eating out more or less in the next 12 months?
10%
More in the next
12 months
70%
20%
About the same
Less in the next

12 months
We will be eating
out less in the next
year unless
finances improve.
Female
16-24, Leicester
There are three additional factors

which will continue to impinge on
consumers propensities to eat out
in the short to medium term:
Individuals will be plagued with
low consumer confidence for
some time yet and a changed
mentality about how they should
be spending their money this
mentality could be irrecoverable
The rise of healthy eating and the

awareness of healthy eating.
Britons are in the knowledge that,
if they cook from home, they are
able to better control what they
consume and monitor their
calorie, fat and salt intake. More
operators will respond to this
trend and improve the number of
healthy options they offer
The growing dominance of
supermarkets. Since the
recession, many supermarkets
have introduced dine-in ranges
which enable consumers to
recreate the eating out
experience, but for far less money
Chapter 4
Eating Out
Mega Trends
In This Chapter
The eating out mega

trends
The rise of healthier
eating
Healthier eating out
habits
Healthy eating
consumer typology
Healthy eating by
daypart
The future of healthy
eating
The rise in
importance of
provenance
Industry views on
local sourcing
Additional trends
and business
responses
KEY POINTS
Consumer and industry executive
research reveals two noneconomic mega trends that are
shaping the industry today and
will continue to do so in the future
the rise of healthy eating and
the demand for local sourcing
of food
Healthy eating is the most
influential non-economic
consumer trend cited by industry
leaders while local sourcing is the
most influential menu trend
67% highlighted its importance
Healthy eating is a hugely
important consumer trend and is
here to stay. Customers within
the Informal Eating Out market
look set to become more health
conscious and more aware of
calorie consumption and this
will force more suppliers and
operators to enhance the
healthiness of their menu options
Nearly half of consumers have
changed their eating out habits to
become more healthy. Consuming
more fruit and vegetables (23%)
and reducing fat intake (19%) are
the leading changes made
Consumers choose healthier
options more often during midmorning snacks (55%) and at
lunchtime (48%). They are least
likely to do so during dinner
(22%) and when snacking late at
night (14%)
There are four distinct healthy
eating consumer segments, based
on their levels of commitment to,
and interest in, healthier eating:
Disciplined Eaters, Healthy Eating

Pragmatists, Indulgent-led
Adventurers and Healthy Eating
Rejecters
People are interested in where
their food has come from
knowledge of origin gives many
consumers greater reassurance
about the quality of the food they
are eating
Organics have taken a major hit
during the recession and it is
debatable whether sales will
recover without stronger
communication of a more
compelling value message
Local/regional sourcing is viewed
as a means by which independent
and smaller operators can
differentiate themselves from
branded chains with typically less
flexible supply chains
58% of people prefer to eat at
places where the food is sourced
from the UK
78% agree that more information
should be made available about
the origin of food bought from
fast food and takeaway outlets
underlining how this is not just an
issue for middle-upper market
operators
Given its associated costs, the
recession is causing some
reduction in UK sourcing.
However, a post-recession pick-up
is expected as quality starts to
receive more attention in the
quality/price trade-off
The Eating Out Mega Trends
The previous chapters

have mapped out the
scale, the history, and the
consumers of the
Informal Eating Out
market in the UK.
Much of the analysis in previous
chapters focused on the changing
demands of consumers and the
response of the sector to the
recession. This chapter looks at the
underlying non economic mega
trends that are shaping the sector
now, but are also predicted to have
an impact in the future.
Table 4.1 WHICH ETHICAL INITIATIVES ARE THE MOST IMPORTANT FOR EATING
OUT ESTABLISHMENTS TO ENGAGE IN?
RANK ETHICAL INITIATIVE
1
2
3
4
5
6
7
8
SUPPORT LOCAL SUPPLIERS

PROMOTE HEALTHY EATING
CLEAR POLICIES ON ANIMAL WELFARE

ETHICAL SOURCING
SUPPORT LOCAL CHARITIES AND COMMUNITIES
ENVIRONMENTALLY FRIENDLY PROGRAMMES
STAFF DEVELOPMENT AND TRAINING

ANTI-LITTER ACTIVITIES
There are two trends that stand

out above all others and are
recognised by both consumers and
industry executives as the mega
trends that will shape the sector;
the demand for healthy eating,
and the increasing importance of
local sourcing.
When consumers were asked

about the initiatives that
companies should support or back,
support for local suppliers and the
promotion of healthy eating
ranked far above any other ethical
initiative.
Industry executives gave the same

response when asked about the
trends that would influence their
menus over the next 3-5 years.
Head and shoulders above any
other trends were local sourcing
and healthy eating. It seems clear
that consumers and operators alike
agree these are the two trends to
watch and understand.
Fig. 4.1 MOST INFLUENTIAL FUTURE MENU TRENDS OVER THE NEXT 3-5 YEARS
67%
65%
20%
19%
18%
13%
12%
12%
11%
10%
Locally
sourced
products
Healthy
eating
Allergy free
items
Fairtrade &
ethically
sourced
products
Free-range
products
Smaller
portion sizes
Vegetarian
options
Influence of
celebrity
chefs
Greater
appreciation
of fine wines
Coffee
culture
Source: Allegra Strategies Research & Analysis 2009
The Rise of Healthier Eating
Eating more healthily is a goal for society at large and more

progressive operators will benefit from the enhanced
customer feedback the greater provision of nutritional
information will generate.
John Hutson
Chief Executive, JD Wetherspoon
Looked at since the

emergence of the Informal
Eating Out market, the
rise of healthier eating is
in part a response to the
success that the food
industry has achieved in
making different types of
food products widely
available to more
consumers on more
eating occasions.
From the austerity and limited
choice that existed at the
beginning of the 1960s, there is
now a vast abundance of food and
beverage options available 24-7.
The gradual emergence of many
more diet, low fat and healthy
options in the retail environment
has met the demand for healthy
eating and increased consumer
awareness of the issue.
While the noughties are an age of
unprecedented plenty, so they are
also a time of increasingly
knowledgeable and demanding
consumers, with greater
recognition of the truism that we
are what we eat. This is driving
increasing food culture and
demand for more natural and less
processed food. Indeed, in many
ways, the rise of healthier eating
and more disciplined consumption
59
marks a return to some of the

more positive aspects of eating
behaviours 50 years ago. Healthy
eating is a crucially important
long-term trend. It stands as one
of the few genuine consumer
megatrends and is continually
being shaped by a plethora of
consumer, corporate, Government,
media and societal influences as
Figure 4.2 shows.
Within Allegras most recent Top of

Mind survey of Food & Beverage
Industry leaders carried out in Q4
2008, healthy eating was identified
as the most important noneconomic trend affecting
consumer behaviour. It was second
only to greater price consciousness,
although after the recession,
healthy eating has the potential to
regain primary status. As one
industry executive remarked:It is
timeless.
Table 4.2 INDUSTRY LEADER VIEWS ON MOST IMPORTANT CONSUMER

TRENDS AFFECTING UK FOOD & BEVERAGE SECTOR, TOP 10 RANKING
Q4 2008 VS. Q4 2007
CONSUMER TREND
PRICE CONSCIOUSNESS
HEALTHY EATING
SQUEEZE ON HOUSEHOLD BUDGETS
MORE DEMANDING CONSUMERS

CONVENIENCE
RISING COST OF LIVING
MORE KNOWLEDGEABLE CONSUMERS

BUSIER LIFESTYLES
LOCAL PROVENANCE
GROWING FOOD CULTURE

Source: Allegra Strategies Analysis, Top of Mind Survey, 2009
2008
2007
N/A
13
15
10
10
12
Fig. 4.1 KEY INFLUENCES DRIVING THE GROWING IMPORTANCE OF HEALTHY EATING
MEDIA INFLUENCES
Increasing health
coverage
Availability of
information
Evolving cookery
programmes
Celebrity influences
CORPORATE
INFLUENCES
New product
opportunities
Marketing messages
CSR initiatives
Competitive
differentiation
SOCIETAL INFLUENCES
Changing lifestyle habits
Growing concern over obesity
Greater health consciousness
Wider well-being awareness
GROWING
IMPORTANCE OF
HEALTHY EATING
CONSUMER
INFLUENCES
Increased demand
Growing knowledge
Rising expectations
Greater information
availability
GOVERNMENT
INFLUENCES
Increased labelling
information
Product content
targets and advertising
restrictions
Healthy eating
initiatives
Focus on school
dinners
Healthier Eating Out Habits
Government and industry

initiatives to promote
healthy eating,
particularly the 5-a-day
programme, appear to
have generated traction
with consumers.
This is impacting out-of-home
consumption patterns nearly half
say they have made changes to
what they eat out of home. Close
to 1 in 4 adults claim to have
increased their intake of fruit and
vegetables over the past 12
months. Lower consumption of
higher fat products also emerged
as a popular response.
Just over half of adults (52%) have
not made any changes to the
healthiness of what they consume
when eating out. Allegras detailed
customer research highlights a
number of factors as to why this
proportion remains so high:
Eating out for many remains a

treat and an indulgence
Consumers are not prepared to
compromise on taste and do not
believe they will receive the same
level of pleasure from healthier
products
For some, there is the perception
that healthier eating is more
expensive
A proportion of people are fed up
with being lectured to about
healthy eating
Food nutrition is poorly
understood by consumers who,
for the most part, are not easily
able to develop a greater
understanding
Lack of nutritional information
available on which to base a more
informed menu choice
There is a strong core of
consumers who are not interested
in changing their eating habits
As one interviewee noted:
I eat very healthily

at home. Going out
is more of a treat
so taste is the most
important thing.
There is nothing
wrong with
indulging once
in a while!
Female
30-34, Peterborough
Fig. 4.3 AGREEMENT WITH WHETHER

CHANGES HAVE BEEN TO
EAT MORE HEALTHILY WHEN
EATING OUT
When eating out of home
over the last 12 months,
have you made a conscious
decision to eat more
healthily?
Percentage of Respondents
48% 52%
Yes
No
Source: Allegra Strategies Analysis,

Consumer Research, 2009
Fig. 4.4 CHANGES MADE WHEN EATING OUT REGARDING HEALTHY EATING
When eating out of home, what changes have you made concerning healthy eating in the last
12 months? Percentage of Respondents
23%
19%
12%
11%
11%
10%
9%
8%
8%
6%
Eaten more
fruit & veg.
Reduced fat
Reduced
sugar/
sweets
Drunk more
water
Eaten less
fast food
Eaten
smaller
portions
Reduced salt
Reduced
calorie
intake
Reduced
carbohydrates
Drunk less
alcohol
Healthy Eating Consumer Typology
Analysis of the
behaviours and attitudes
from over 2,000
household interviews has
produced a four-fold
categorisation of
consumer types in
relation to their
enthusiasm for, and
engagement with, healthy
eating:
Healthy Eating Pragmatists
Indulgent-led Adventurers
Mainly eat healthily but

sometimes like to treat
themselves
Mainly eat what they want but

sometimes choose healthier
options
I do try and make

a conscious effort to
eat healthily out of
the home; but try to
get the balance of
setting a good
Disciplined Eaters
example to my
Avoid unhealthy food as healthy
eating is very important to them
daughter and also
enjoying food for
As one interviewee noted:
the taste and
At lunchtimes I eat texture, so am not
lightly, typically
totally calorie
opting for a salad
conscious. So, for
with some protein
example if I know I
and no dressing.
really want to try a
Female
calorific pudding, I'll
20-24, St Albans
probably choose a
healthier main
course, or just have
a starter and
pudding.
I like to look
through the menu
and choose
whatever I fancy.
However, I rarely
have a dessert.
Female
50-54, London
Healthy Eating Rejecters

Eat what they want and do not
worry about eating healthily
I eat what I like.

Female
35-39, Scotland
Fig. 4.5 CONSUMER TYPOLOGY OF

ATTITUDES TOWARDS
HEALTHY EATING
Female
40-44, Aberdeen
Disciplined Eaters 8%
Healthy Eating Pragmatists 47%
Indulgent-led Adventurers 32%
Healthy Eating Rejectors 13%
Table 4.3 KEY CHARACTERISTICS OF HEALTHY EATING CONSUMER TYPOLOGY BY SEGMENT

PREDOMINANT
CHARACTERISTICS
GENDER, AGE
AND HOUSEHOLD
AFFLUENCE AND
SOCIO-ECONOMICS
EATING
PREFERENCES
FAVOURED EATING
OUT VENUES
HEALTHY EATING
ATTITUDES
63
DISCIPLINED
EATERS
HEALTHY
EATING
PRAGMATISTS
INDULGENT-LED
ADVENTURERS
HEALTHY
EATING
REJECTERS
Female; Age skew

towards older
adults
Female; 25-44 years

and with kids
Male; 18-24 years
Male; bias to 18-24

or 65+ years old
Average profile, but

slight skew to D/Es
Above average
affluence
No distinct bias
Below average
affluence levels
Avoids fast food,

little snacking and
reducing takeaway
consumption
Eating out is a
treat, more cooking
from scratch and
packed lunches
Frequently on-themove and enjoys

snacking, fast food
and evening meals
Likes fast food,

takeaways, snacks
and late night
eating
Likes independent
cafs and local pub,
including those
with carvery
Likes coffee shops

and cafs
Wide repertoire
including informal
restaurants, fast
food units and
pubs
Likes fast food

chains, inexpensive
pubs and Chinese
takeaways
Have reduced fat,

carbohydrate and
salt intake, highest
agreement that
not enough
healthy options
and strong
enthusiasm for
calorie labelling
Agree that
insufficient choice
of healthy eating
options exists and
preference towards
introduction of
calorie labelling
Do not subscribe to
the view that
insufficient healthy
options are
available, but
balance of opinion
in favour of calorie
labelling
Minimal changes
to dietary habits,
strong preference
for taste over
health and lowest
desire to see calorie
labelling
Healthy Eating
by Daypart
It is a recognised eating
out trend that people eat
more healthily at the
start of the week, but
that this changes to
become more indulgenceled as the week
progresses.
It is also the case that eating out is
more health-oriented during the
first part of the day, and becomes
distinctively less so during evening
and at night.
Analysis of consumers eating out
behaviours found that, on average,
only on 38% of eating occasions
was a conscious decision made to
choose a more healthy option. This
proportion was highest for a midmorning snack at 55%, but lowest,
at 14%, for a late night snack.
Interestingly, while consumers
might make an effort to eat
healthier breakfasts at home, this
is less evident when they are on
the go.
Table 4.4 PROPORTIONS OF CONSUMERS MAKING A CONSCIOUS DECISION

TO CHOOSE A HEALTHY OPTION WHEN EATING OUT BY DAYPART
MEAL OCCASION
BREAKFAST
MID-MORNING SNACK
LUNCH
MID-AFTERNOON SNACK
DINNER
LATE-NIGHT SNACK
OVERALL AVERAGE
YES
NO
to Healthy
Option
to Healthy
Option
34%
66%
55%
45%
48%
52%
25%
75%
22%
78%
14%
86%
38%
62%
The Future of Healthy Eating
Healthier eating is a longterm trend and one that,

particularly within the
eating out sector, looks
set to grow in importance.
Consumer awareness of the calories

contained within different product
options is going to increase with
calorie labelling. As consumers are
influenced by healthy eating
campaigns and the actions of
government and NGOs so the
eating out market will need to
continue to innovate and adapt in
order to keep pace with customer
demand and an increased level of
awareness of what their food
contains. In the short term, the
response involves developing and
reformulating food and drink that
are lower in salt, sugar and fat, and
in continuing to enable more
consumers to make better informed
product choices. Ultimately,
consumers will have to make subtle
changes to their palates and taste
expectation.
Because healthy eating is one of the
mega trends impacting on the
eating out industry, suppliers and
operators who fail to respond and
improve the healthiness of their
products and menu offers will lose
out as the competitive bar is raised.
New product and ingredient
innovation will be catalysed as
operators introduce a wider range
of healthier options. In some cases,
product and portion sizes may be
amended to meet reduced calorie
count targets.
The industry executive research
shows that there are other more
detailed healthy eating trends that
are possible:
Families moving away from
establishments, which they do not
perceive to offer a suitably
balanced range
65
Table 4.5 A SEGMENTATION OF FUTURE CONSUMER APPROACHES TO

HEALTHIER EATING
FOCUS
Clearly defined perspective on health

and healthy eating:
Customised eating based on foods with a direct benefit
Obsessive knowledge of own food consumption
Rejection of unhealthy foods
BALANCE
Moderation and discipline, and negotiating

extremes:
Calorie intake and expenditure held in check
Indulgent foods combined with more healthy foods
Portion size discipline
SLOW
Value process of food growth and preparation:

Inclination to rest and relax more
Belief in cooking from scratch and slow cooking processes
Use of quality ingredients that are fresh and seasonal
POSITIVE
Idea that positive eating leads to a

positive life:
Healthy body healthy mind
Eating experience as important as eating itself
Focus on what to eat instead of what not to eat
SUSTAINABLE
Consumers desire to preserve way of living:

Embrace concept of planetary health
Good for me human sustainability
Belief in locally grown and communal products
Younger females are among the

most conscious of what they
consume and are most likely to
switch their purchasing patterns
Sales of products that consumers
do not currently recognise as
being highly calorific are likely to
be impacted
More manual worker groups may
consume products offering higher
calorie counts per unit cost
Increased ordering of one or two
courses rather than three, and of
shared dishes
Additionally, there is the genuine

prospect of growth in the number
of consumers who fall within the
Disciplined Eaters and Healthy
Eating Pragmatist categories.
However, over the longer term,
there is expected to be further
segmentation of the healthy eating
advocates, with new and subtly
different consumer sub-groups
formed as they embrace more
personalised lifestyle and wellbeing
orientations. These are summarised
under the headings of: Focus,
balance, slow, positive and
sustainable.
The Rise in Importance of Provenance

Table. 4.6 KEY PROVENANCE CAMPAIGNS
Media Interest in Provenance
KEY
COMPONENTS
BUYING
BRITISH
Buying British is the

campaign to encourage
British consumers to
buy British
products
over foreign
alternatives
FAIRTRADE
Fairtrade products aim

to help producers in
developing countries
and promote
sustainability
ABOUT
Buying British is a relatively recent, but fast growing phenomenon amongst
operators and consumers alike. People buy British to support the local
economy, as well as reduce concern over food miles
Britains leading supermarkets have taken steps to increase their UK
sourcing, particularly for meat products
The Red Tractor logo is now commonly found on products, providing
assurance that food has been sourced from high quality British producers
In September 2009 the annual British Food fortnight will again bring this
topic to the forefront, highlighting the diversity and quality of UK produce
2008 UK Fairtrade sales totalled 700 million, up to 43% from 2007

(fairtrade.org)
Growing demand for Fairtrade can be attributed to the rise of the ethical
consumer
Greater consumer education and awareness of the benefits of Fairtrade to
Third World producers has led to a significant increase in demand for such
products
The recession has not stopped people from buying Fairtrade produce - an
estimated quarter of British consumers purchased Fairtrade products in
January 2009 (IGD - Shopper Trends, 2009)
ORGANIC
Organic refers to food

grown without artificial
fertilisers or pesticides
and in a way that
emphasises crop
rotation and
making the
most of
natural
fertilisers
RAINFOREST
ALLIANCE
Rainforest Alliance
works to conserve
biodiversity and ensure
sustainable livelihoods,
by transforming landuse practices, business
practices and consumer
behaviour
Following more than a decade of sustained growth in this area, the

economic downturn has resulted in slowing demand for organic products
According to The Soil Associations Organic Market Report 2009, sales of
organic food grew by only 1.7% from 2007 to 2008, compared with a 22%
increase from 2005 to 2006
Dairy products and fresh fruit and vegetables are the most heavily
purchased organic products, accounting for 30% and 26% of organic
spending respectively in 2008
It appears that organic products are perceived to be expensive rather than
mainstream items - consumers are not convinced about the product benefits
and are unwilling to pay the organic premium in the current climate
Established in 1986, Rainforest Alliance now rivals The Fairtrade Foundation

and other such established bodies. Rainforest Alliance ensures farmers
benefit financially but offers cheaper prices on coffee and no licensing fee to
use their logo (unlike The Fairtrade Foundation which charges a 2% fee based
on the wholesale coffee price)
For this reason, it is popular choice with the large food and beverage brands
wanting to tap into the ethical market
Companies already aligned with the Rainforest Alliance include Kenco Coffee
Company, Costa Coffee, Lavazza and McDonalds - sustainability is a hot topic
and companies who are found lagging on sustainability could face
difficulties in the long term
Rainforest Alliance continues to grow worldwide - it is active in more than
60 countries and now covers 2.6m coffee farms. This number is doubling
every year
Brands switch to Rainforest Alliance certified coffee are experiencing a 5-10%
increase in sales in the months following their conversion; McDonalds who
switched to Rainforest Alliance coffee in 2007 saw a 24% sales jump
SEASONAL
PRODUCTS
Seasonal food refers to

the time of the year
when given food type is
at its peak either in
terms of
harvest or
its flavour and typically
both
Eating in-season is gaining popularity and is a growing trend on restaurant

menus
In 2008 celebrity chef, Gordon Ramsey, called for legislation to ban
restaurants from putting out-of-season produce on their menus
The Eat Seasonably campaign, launched in May 2009, aims to promote fruit
and vegetables at their seasonable best and reconnect people with the food
they are eating. It is supported by Defra Secretary of State Hilary Benn and
the UKs major supermarkets
Seasonal products present a potential market opportunity for restauranteurs
and retailers - Burgerville, a fast food operating in the US, serves only
seasonal food options sourced locally. Others could follow this example
Research clearly
highlights that
consumers are keen to
know more about the
origin of their food.
78% of respondents agreed that fast
food and takeaway outlets should
provide more of this information.
Amidst this rising concern, some
specific trends and campaigns have
sprung up, which are outlined in
Table 4.7.
Of these, Fairtrade and organic are
perhaps the most established, and
whilst the trend for Fairtrade food
has remained robust, demand for
organic has waned. Organic
produce has suffered in the midst of
the economic downturn as people
are unwilling to pay the premium
typically charged as they do not feel
organic food offers value for money.
Buying British is a trend which has
gained momentum recently and
has become a key aspect of demand
from consumers. Equally,
seasonality has increased in
popularity with consumers and
with operators responding to this
with more frequent changes in
menus. The number of farmers
markets in the UK has drastically
increased in the last five years.
There are now around 800 farmers
markets in the UK today, compared
with 450, five years ago.
It's important to
know what they are
selling in fast food
chains. They mostly
sell cheap food so
I'm worried about
what I am eating.
Female
30-34, Peterborough
Consumers typically hold the view

that food which is highly priced is
derived from a better source. As
expressed earlier, the view amongst
consumers is that high provenance
foods are higher quality and, in turn,
will have a price to match. As food
in fast food operators and takeaway
outlets is inexpensive, there is more
concern from consumers that it has
derived from poor quality origins.
Fig. 4.7 CONSUMERS ATTITUDES

TOWARDS PROVENANCE
UK sourced food is
more expensive
and I don't want to
pay more just for
UK labelled food.
Female
30-34, Cardiff
exerci tation ullaexerci tation ulla

As long as the
food looks and
tastes good, I don't
care where it
comes from.
Fig. 4.6 CONSUMERS ATTITUDES

TOWARDS THE ORIGIN OF
FOOD
I prefer eating at establishments

where I know the food is sourced
from the UK
Disagree 20%
Female
Neither 21%
Agree 59%
16-24, Blackpool
I prefer eating
food sourced from
the UK in order to
support local
suppliers.
Research has also indicated that it is

those in lower socio-economic
groups
exerci tation ullaexerci
tation ullawho are more concerned
that their food is sourced from the
UK. These groups may be more
eager to support their local
suppliers during periods of
economic downturn. They may also
be consuming foods which are
typically less expensive and,
therefore, have more concerns over
the origin of such produce.
More information should be made

available about the origin of food
bought from fast food and
takeaway outlets
Disagree 9%
Neither 13%
Agree 78%
Whilst consumers want more

information provided about the
origin of their food, they also want
to eat food which is sourced from
the UK. 58% of people prefer to eat
food which is sourced from the UK
a demand which is partly being
driven by the recent attention over
support for British farmers and
produce, as well as consumer
preference for the freshest food.
67
Male
35-39, Cardiff
For health
reasons, I would
want to know the
origin of my food.
Male
16-24, Blackpool
Fig.4.8 ATTITUDES ABOUT UK PRODUCE BY SOCIO-ECONOMICS

I prefer eating at establishments where I know the food is sourced from the UK
22%
22%
18%
19%
17%
18%
23%
23%
56%
55%
65%
63%
A/B
C1
C2
D/E
Disagree
Neither
Agree
In addition to lower socioeconomic

groups, it is also the older
generations who care more that
their food is of British origin. 68% of
people aged 55 and older agreed
that they prefer to eat in
establishments where the food is
sourced from the UK, compared
with 47% of 18-24 year olds. There
are likely to be two key reasons for
this: An interest in buying British
could be associated with a
traditional set of values more
commonly associated with the
older age groups. Those living on
pensions may also be attracted to
more keenly priced foods, and are
conscious about the quality and
origins of these products.
Fig. 4.9 ATTITUDES ABOUT UK PRODUCE BY AGE

I prefer eating at establishments where I know the food is sourced
from the UK
30%
23%
27%
19%
22%
23% 26?%
23%
14%
16%
20%
15%
47%
50%
52%
58%
67%
69%
18-24
25-34
35-44
45-54
55-64
65+
Disagree
Neither
Agree
Industry Views on Local Sourcing
Figure 4.10 clearly

indicates the rise in
concern amongst senior
executives in the
foodservice industry for
using local suppliers just
in the last year.
Industry leaders want to meet the

demands of their consumers, who
are looking to do the right thing
and who are concerned with better
quality and more seasonal
products. Furthermore, the
recession has, in part, had a
positive effect, with industry and
consumers alike wanting to
support local suppliers when times
are more difficult. However, some
operators are deterred in the
current economic downturn as
there is a significant cost incurred
in using quality assured foods.
Fig. 4.10 RESTAURANTS SHOULD USE LOCAL SUPPLIERS WHEREVER
POSSIBLE
2008
2009
58% 64%
19% 24%
23% 12%
Agree
Neither
Disagree
Source: Allegra Strategies Research & Analysis 2009
Provenance has
been a growth
area. However, we
Provenance is
have seen evidence
increasingly
of reduced
important to our
enthusiasm for this
consumers and I
trend as the
would say that a
recession has
good many actually
progressed.
now expect it as a
Stephen Clifford
given, but at no
Marketing Controller, Brakes
extra cost.
Julia Hatcher
Category Manager
Foodservice, Sainsburys
69
As mentioned at the start of the

chapter, a substantial 67% of
restaurant senior executives and
individual restaurant
owner/operators believe that
offering locally sourced products will
be the biggest trend affecting
menus in the next three to five years.
When asked how they saw

restaurant menus changing in the
next three to five years, industry
leaders responded as follows:
More freshness,
provenance and
improvement in
quality.
Ben Bartlett
Food Development Manager,

Scottish & Newcastle Pub
Enterprises
Seasonality and
provenance of
produce will be
highlighted.
Will Smith
Managing Director, Arbutus

Restaurant
More focus on
lighter, healthier
ingredients; item
provenance
becoming explicit in
more dish
descriptions;
stronger flavours
and global
spicing.
Commercial Manager
Leading Restaurant Group
Local sourcing is currently a high

profile trend and a key part of a
rising food culture; nonetheless, it is
right to question whether this trend
is sustainable, or whether interest
may wane in a similar fashion to

organics. Concerns exist around the
extent that operators and their
customers will pay the price
premium frequently placed on foods
with specific origin and quality
assurance and also about the supply
capacities of many smaller scale
suppliers. As far as local sourcing is
concerned, many independents have
insufficient knowledge of suppliers,
and are concerned with red tape
and health & safety issues.
A food safety program, the Safe and
Local Supplier Approval scheme, has
been developed by several bodies
including the British Retail
Consortium, and is designed to
make it easier for local retailers to
stock more locally sourced food. The
scheme enables retailers to source
more food directly from small
suppliers, while helping to minimise
the costs associated with food

safety checks.
With many industry leaders
predicting that localness will
significantly impact menus in the
next five years, they clearly see local
sourcing as a long-term trend. The
importance of food provenance is
further supported by its links with
eating well and general well-being
points that will continue to be
fuelled by media coverage and
celebrity chefs campaigns around
British and seasonal produce. The
signs are that local sourcing could
become an even more influential
trend within the UK Eating Out
market.
Case study
Pret A Manger
Long known for its

attitude to freshly
prepared food,
Pret A Manger is
at the forefront of
developments on
sustainable sourcing
and quality assurance.
A number of its
initiatives are
highlighted below:
Sourcing
ORIGIN OF PRODUCTS
Sources British products and local products where possible, e.g.
English apple juice and Wiltshire-cured ham
Only uses Open Barn chickens
Only uses organic milk
All eggs are free-range
All products are authentic provides consumers with full details of
the origin of products, for example, Fairtrade fruit from the Philippines
SUSTAINABILITY
Bluefin tuna is no longer on the menu until supply from sustainable
fisheries can be guaranteed
Quality
QUALITY ASSURANCE SCHEMES

Strong adherence to quality assurance schemes
Pork is British Farm Assured
Salmon is Marine Stewardship Council certified
FRESHNESS
Fresh ingredients are delivered daily
Products are made fresh in store each day and leftovers are given to
charity
Shelf life of coffee beans is limited to two weeks to ensure freshness
and, in a unique initiative, unused beans are composted
Supply Chain
Thorough knowledge of product origin, farming practises, rearing,
harvesting, production and delivery
Additional Trends and

Business Responses
Longer term trends
lie with consumers
demanding more
openness and
accountability from
the companies they
transact with.
The combination of consumers
having increasingly greater access
to information 24-7, becoming
more selective about how they
allocate their spending, and
emerging from the recession with
more values-driven (not purely
value-conscious) mindsets, means
that more organisations need to be
more transparent with their
customers. Corporate initiatives
and gestures must be backed up
with substance for them to have
genuine traction with consumers.
This is raising the competitive bar

for operators across the
foodservice industry, and is driving
on-going improvements in not just
healthier eating and provenance,
but in many additional areas that
are set to rise further up the
consumer agenda. Foremost here
are issues around sustainability
and environmental impact.
Following an approach of if you
cant measure it, you cant manage
it, more progressive businesses are
conducting environmental and
ethical audits and producing
detailed reports on the progress
being made against a series of key
performance indicators and
targets.
A poll of senior executives across

the Food & Beverage industry
reveals that energy efficiency is
expected to be the most important
ethical initiative over the next five
years. Energy efficiency is a
concern for all businesses from a
CSR perspective, but it also clearly
has a direct bottom line impact
and, in these recessionary times, its
relevance is underlined.
Corporate disclosure remains
variable currently, but this will
change as companies recognise
that they need to become more
responsive to consumers, and that
consumers will become more
powerful in shaping what
business does.
Fig. 4.11 THE MOST IMPORTANT ETHICAL INITIATIVES OVER THE NEXT 5 YEARS
35%
33%
32%
31%
28%
26%
26%
22%
19%
15%
Energy
efficiency
Ethical
sourcing
Reducing
carbon
footprint
Recycling
Reduced
packaging
Waste Mgt
Sustain-able
packaging
Local
sourcing
Employee
development
programmes
Reducing
food miles
Source: Allegra Strategies Analysis, Top of Mind Survey, Dec 2008
Chapter 5
The Future of the Informal

Eating Out Market
In This Chapter
Short-term
expectations
The recession and

its legacy
Medium-long term
business
imperatives
Up and coming
brands
The views and

perspectives
developed in this
chapter are derived
from a number of
sources, including
detailed interviews
with 25 leading
industry executives,
surveys with senior
managers of over 80
restaurant chains and
over 100 independent
operators. In addition,
the analysis is
informed by key
findings from
Allegras consumer
research insights
and from extensive
desk research.
73
KEY POINTS
After an envisaged 0.5%
contraction in 2009, the Informal
Eating Out market is forecast to
see a modest recovery in 2010
with growth of 0.5%-1.0%. Rising
unemployment will remain a
concern and a barrier to a
stronger pick-up
The recession will lead to a lasting
legacy of enhanced value
consciousness by consumers as
they become more demanding
about their eating out, with
higher expectations of the quality
of their food and of the perceived
value for money
Established underlying trends of
rising affluence, growing mobility
and more youthful older
consumers will support stronger
growth in eating out over the
medium-long term. Following an
Olympics boost in 2012, the
market is forecast to reach
47.5bn by 2014, with a CAGR*
of 3.4%
Foodservice will play a greater
role in the reinvigoration of the
High Street as a more leisureoriented destination but the
pace of this will be set by
landlords softening in rental
expectations
better value, healthy eating,

convenience, authenticity, local
sourcing and added-experience
Growth prospects are anticipated
most strongly in fast casual,
healthier, Oriental, British and hot
food-to-go
The poorly differentiated middle
ground will become a riskier
positioning for generalist
operators trying to cover too
many cuisine types
There may be fewer pubs in
prospect but they will increase
their share of the Informal Eating
Out market simply because
developing food sales is critical to
their survival
The market structure will change
with the emergence of a far more
consolidated eating out market,
with fewer independents and
smaller chains, and a stronger
presence of branded chains
Greater daypart targeting can be
expected, as well as the blurring
of foodservice and food retailing
as operators and retailers seek to
capture a greater share of their
existing customers spending and
unlock new sales opportunities
The future of informal eating out

lies with a more specialised and
segmented marketplace, with
operators better delivering on
their core competencies and
extending their points of
difference
Building stronger customer

loyalty will become increasingly
important and result in more
sophisticated schemes, in a
similar vein to those in the retail
sector, that better reward
customers and create stronger
dialogue and relationships
Foodservice winners will be those

companies better equipped to tap
into consumers rising demand for
*Note: CAGR = Compound Annual

Growth Rate
An Introduction
The next 5-10 years will be very different to the last, as
consumers will become more value conscious and operators
focus on ways to improve their value equations. However,
scope to achieve this via cutting prices will be limited and
without loyal customers, much harder still.
Alastair Fairgrieve
Chief Insight Officer - Europe, McDonald's
One of the most logical

places to start when
exploring the future
prospects of the Informal
Eating Out market is
with the past, and
identifying underlying
long-term trends.
This is all the more appealing
when it offers reassurance and
comfort in the form of rising
prosperity and disposable income,
increasing mobility and growing
eating out activity and spending.
The clearly established trend is for
consumers to spend a greater
amount of their total food &
beverage expenditure away from
the home and this has by no
means reached a mature phase.
But, while the medium-long term
outlook is positive, what of the
short-term, and the impact of the
recession? And also, how might
the recession leave a lasting
legacy?
Short-Term Expectations
Table 5.1 ANNUAL GROWTH IN GDP, UNEMPLOYMENT, AVERAGE EARNINGS, INFORMAL EATING OUT MARKET AND FOOD
RETAIL SALES 2004-2010F
MARKET INDICATOR - ANNUAL GROWTH

GDP
UNEMPLOYMENT RATE - YEARLY AVERAGE
AVERAGE EARNINGS
INFORMAL EATING OUT MARKET
RETAIL SALES GROWTH IN FOOD STORES
2004 2005 2006 2007 2008 2009F 2010F

3.2%
1.7%
2.7%
3.0%
0.7%
-3.5%
-0.1%
4.8%
4.9%
5.6%
5.5%
5.8%
8.2%
9.4%
4.4%
4.8%
3.2%
4.2%
3.6%
1.3%
1.7%
6.3%
3.8%
3.8%
8.3%
4.0%
-0.5% 0.5%-1.0%
4.0%
3.2%
3.6%
4.2%
5.8%
2.0% 2.0%-3.0%
Source: Allegra Strategies Analysis, ONS, Item Club, CBI, 2009
The scale of the current

recession is evident
across several business
indicators, not least GDP,
which is predicted to fall
strongly this year. The
annual growth forecast of
3.5% would be the
weakest for over 50
years.
Despite some expectations that
output will stabilise by the year
end and that a modest recovery
will begin next spring, a major
concern lies with rising
unemployment. It is forecast that
900,000 jobs will be lost this year,
with another 500,000 to go in
2010, when unemployment will
exceed 3 million. This will
exacerbate worries about job
security and impact the growth in
average earnings. In turn, it will
weaken confidence levels and hit
consumer spending, particularly on
more discretionary items.
However, expenditure on
household necessities, not least
food and drink, is expected to
remain more robust and this will
continue to support growth in
retail sales within food stores.
75
Factor in the consumer research

finding that the greater balance of
adults are more likely to be eating
out less in the next 12 months, and
it is difficult to be optimistic about
the near term prospects for growth
in the Informal Eating Out market.
Indeed, a decline of 0.5% is forecast
for 2009. A slightly stronger
outcome is predicted for 2010, but

this is likely to be skewed towards
the second half of the year. This is
in keeping with Allegras survey of
Restaurant Leaders, with the
largest proportion of senior
executives expecting a recovery in
12-18 months from April/May 2009.
Fig. 5.1 UK RESTAURANT LEADERS EXPECTATIONS OF THE TIMING OF

MARKET RECOVERY
QUICK RECOVERY
SLOW RECOVERY
0%
7% 38% 41% 14% 1%
Within 3
months
3-6
months
6-12
months
Source: Allegra Strategies Analysis, Industry Interviews, 2009
12-18
months
18-24
months
More than
24 months
Challenging is a commonly used

term to describe the current
trading environment, and for good
reason, given the continuing
prospect of weak demand and cost
base pressures on food, energy and
staffing. And this will lead to
casualties across the entire
foodservice market. Many
operators are at risk of entering a
downward spiral of cutting prices
(and corners), weakening their
value propositions, losing sales and
having to cut margins further, but
not without potentially critically
undermining core brand values.
The eating out

market appears to
be behaving very
differently in this
recession to the
previous downturn
in the early 1990s.
Previously, volumes
took a nosedive as
margins were held
this time it seems
that margins are
being compressed
as operators fight
to hold onto volume
and share.
Adam Martin
Marketing Director,
Mitchells & Butlers
The big losers in

this recession will
fall into two camps:
firstly, those less
able to, or not seen
to, provide value for
money; and
secondly, those that
too aggressively
play the price card,
undermine their
brand values and
fall foul of it.
David Mann
Managing Director, Philpotts
Nevertheless, despite all the

aforementioned reasons to be less
than cheerful, the point should not
be overlooked that this is a patchy
recession. A number of
householders, particularly those on
tracker mortgages and/or those
with secure jobs, are actually
considerably better off than they
were 12-18 months ago. They
might not be consuming
conspicuously, but they are
continuing to eat out of the home
and benefiting from a number of
special offer deals and promotions.
In addition, recessions present
considerable opportunities to a
number of operators not least
those with value at the heart of
their offers and those with trusted
brands. Consumer consciousness
around value has been elevated and
people are now far more demanding
about wanting more for less.
In recessions, consumers become

more risk averse and gravitate to
the brands they know and trust.
Stronger brands will also benefit
from:
Greater availability of new
development sites on more
favourable terms in a falling
property market
Greater relative access to capital
to fund store refurbishment and
site acquisition
Better conditions for the
recruitment and retention of
higher calibre staff
Opportunities to capture market
share gains from weaker chains,
which are less able to invest in
their propositions, and from the
inevitable market casualties
I think those
companies that are
continuing to
innovate and invest
during the
recession will be
the ones who
accelerate out of it.
In my personal
opinion, both Costa
and McDonalds
come to mind.
Malcolm Plows
Trading Director - On Premises,

Coca -Cola Enterprises
Recessionary Legacy
Sustained or Not?
Industry executives
broadly fall into two
camps about whether
this recession will have
a lasting impact.
On one hand, there is the view that
there is a certain amount of
jumping on a recessionary
bandwagon, and that is has to be
borne in mind that economic
activity is cyclical and that
consumers are fickle. On the other,
there is the expectation that we
are on the cusp of a genuine
turning point, one that will see the
sustained re-appraisal by
consumers of how they trade off
quality against price and develop
an enhanced understanding of
what good value for money means
to them. Significantly, the majority
of interviewees were in the latter
camp and argued that there will be
more thriftiness on the part of
consumers and clients in the
future.
The recession will

see a lasting legacy
of consumers
becoming more
selective with their
spending and wiser
with how and what
they buy.
Steven Foster
Head of Retail Categories,

Manchester Airports Group
77
UK adults are re-appraising their

spending patterns and there are a
number of reasons for believing
that the recessionary legacy is
going to have a sustained impact:
review guides and blogs, to help

make better-informed buying
decisions. This activity is only
going to increase and is helping
to stimulate value-led thinking
This recession, perhaps unlike

previous market downturns, has
not just largely affected Blue
Collar workers in more traditional
industries outside the South East.
It is having a far more ubiquitous
impact
Many consumers who were

previously infrequent visitors to
lower price bracket operators may
well have been more than
pleasantly surprised by the value
and satisfaction they have
derived not least from those
venues offering free additional
services such as Wi-Fi,
newspapers and beverage refills
There will be on-going medium

term concerns around rising
unemployment and job security
The depleted state of the nations
finances, with the prospect of tax
rises and/or government
spending cuts, are such that
disposable income growth is
expected to be remain subdued
and lag behind the post-recession
pick up in GDP
Corporate hospitality budgets
and expense accounts have been
cut back and it will be highly
unlikely that companies will
return to the profligacy of the
past
Consumers have become
accustomed to cherry picking
special offers, using vouchers (via
both the printed media and
online) and promotional deals
and weaning them off this is
going to prove difficult
The recession has encouraged
consumers to make greater use
of online tools and aids, such as
price comparison websites,
More fundamentally, the

recession is boosting the rise of
more demanding consumers,
who want more from a host of
suppliers on their own terms.
This is not just about anytime,
any place, anywhere, but also
includes how much they are
prepared to pay
In short, the recession is
sharpening consumers value
expectations and they expect
operators to respond. The future
lies with consumers shaping
businesses, not the other way
round. The recession has merely
accelerated the timeframe for this.
Medium-Long Term
Business Imperatives
With ever more
demanding consumers,
the corporate response
lies with operators adding
more value to the
customer visit.
Most noticeably, foodservice
companies will be going back to
basics and focusing in on their
core competencies and points of
difference. This will result in
growing segmentation and
specialisation, a more competitive
marketplace and require much
greater levels of customer insight
and dialogue to build loyalty. These
aspects of the future shape of the
Informal Eating Out market are
each worth commenting upon:
GROWING SPECIALISATION
AND SEGMENTATION
It is a common feature of markets
that, as they mature, they become
more specialised and segmented,
as operators carve out niche
concepts and look to exploit
smaller pockets of demand in a
more saturated market. This is
already happening in many areas
of the Informal Eating Out market.
Examples include the growth of
more types of South East Asian
cuisine, such as with Balinese,
Malaysian and Thai; and the
increase in premium burger
concepts, including the Gourmet
Burger Kitchen, Byron and Nandos.
This trend has much further scope
to be developed, both in cuisine
types and exploiting gaps in
prevailing price architectures. In
due course, there will be a stronger
boost from premium product
innovation, but the real impetus at
the moment lies with growing
consumer demand for locally

sourced products and authenticity.
This has partly originated from the
rise of food culture and Britons
becoming more travelled, which
has generated a desire for more
genuine eating out experiences. It
has led to the launch of several
smaller concepts, including Jamies
Italian, Ping Pong and Sacred (see
Case Study 2).
consumer trust and recognition

than many smaller and
independent operators, and will be
tougher to trade against. However,
the same levels of scale economies
do not exist within foodservice
compared with food retail, hence
the level of dominance enjoyed by
the leading supermarket chains
will not be replicated within the
eating out market.
Growing specialisation will also

serve to weaken the hand of the
generalist providers. This includes
several pub chains, which are
responding with more aggressive
special promotions and offering
highly competitive prices. There is
inevitably a margin implication
that not all operators will be able
to offset through higher volume.
Together with brand perception
damage, it is questionable how far
this strategy is sustainable over the
medium-long term. Developing
additional compelling reasons to
visit and return are essential.
Secondly, it is also not necessarily

the case that there will be
significantly more businesses.
Larger businesses benefit from
greater funding and buying power,
and this will further drive
consolidation in ownership. The
restaurant sector already has a
substantial number of multi-brand
operators (for example, the
Gondola Group with ASK, Byron,
PizzaExpress and Zizzi; and the
Restaurant Group with Blubeckers,
Chiquito, Frankie & Bennys and
Garfunkels) and more of these are
likely to come as weaker chains are
acquired and new specialised
concepts developed.
MORE COMPETITION
The good news for companies in
the sector is that, over the
medium-long term, there is
forecast to be more meals
consumed out of the home. The
bad news is that it is going to be a
more competitive marketplace.
This latter point, however, needs
clarification on two fronts.
Firstly, there will not necessarily be
more competitor outlets. As with
the natural market maturity
process, it will migrate towards a
less fragmented, more
consolidated market structure.
Larger foodservice brands benefit
from significantly higher levels of
These larger brand stables will be

under increasing pressure,
however, to be more transparent
about their various business
practices and corporate
responsibilities. People will become
more interested in the businesses
behind the food outlets. This is
part of the ongoing process of
consumers becoming better
informed and more discerning, but
will also reflect greater adoption of
more values-led agendas.
Currently, in many multiple retail
brand foodservice companies, this
level of disclosure is relatively
modest and will need more
attention.
New restaurant outlets are likely to

fill many of the retail voids being
created on the High Street. High
Streets are going to have to
become more leisure-oriented to
sustain their vitality and a
stronger foodservice presence has
an important role to play in this
revitalisation. Indeed, more
progressive planning authorities
will already be revising land use
allocations and categorisations to
facilitate this reinvigoration. More
importantly, this process will also
require more accommodating
landlords. Foodservice operators
will colonise more of the High
Street, and provide an antidote to
claims of growing homogeneity,
but the pace very much depends
on the rate at which landlords
expectations on rents are revised
downwards.
79
GREATER CUSTOMER
INSIGHT
Compared with the UKs food
retailers, foodservice operators
remain relatively primitive. Many
are still not supported by good till
and management information
systems to provide valuable real
time insight on sales trends and
reaction to specific pricing and
promotional activities. A larger
number do not operate any form of
sophisticated (i.e. smart card)
loyalty/reward scheme. These
provide more detailed information
about individual consumers
buying habits and enable operators
to develop better-informed
relationships with their customers.
The recession may well be serving
to curtail investment in non day-today, business-critical initiatives, but
this is going to be an area where
the competitive bar is being raised

as operators search for ways to have
dialogues with their customers and
capture greater feedback to build
loyalty. Traditional foodservice
thinking about loyalty holds that it
is the result of having a great
product, served well in attractive
surroundings. This is not going to
go away, but will be reinforced by
schemes that help operators to
better know their customers and
which help them feel special about
using that particular operator.
The developments and benefits
that Starbucks has introduced with
its card, and YO! Sushi with its YO!
Love Club are good cases in point.
With greater competition, the battle
for customer loyalty is only going to
heat up and there will be greater
focus on ensuring consumers feel
recognised and valued.
Medium-Long Term
Expectations
Research undertaken
with senior executives
across the restaurant
industry, as well as with
owners and managers of
UK independent
restaurants, reveal that
fast casual dining is
expected to register the
highest growth over the
next three to five years.
Fast-casual is a
convenient, easy
way to go out and
have good food
without feeling
formal, and then to
also be able to go
and do other
things.
Healthy eating ranges and British

and South-East Asian cuisines are
also seen as having significant
growth potential.
Bar and Restaurant Group
Group Marketing
Manager
Table 5.2 CUISINE TYPES EXPECTED TO GROW THE FASTEST OVER THE NEXT
3-5 YEARS
Also identified within the research

were the restaurant business
models expected to grow the
fastest over the next three to five
years. Fast casual dining, fast food
and pub food concepts are viewed
as the most promising future
growth formats. The high rating
for fast casual reflects its multifaceted composition, informal
strengths, relative affordability and
innovative operator base. Fast food
benefits from growing demand for
good value, hot food concepts and
an expansion hungry set of leading
operators. Pub restaurants are
supported on the back of
favourable consumer sentiment
and the reality that without a
strong food offer, business
longevity is limited.
RANK CUISINE TYPE

1
2
3
4
5
6
7
8
9
10
FAST CASUAL DINING
E.G. GOURMET BURGERS & CHICKEN, PASTA,

PIZZA, NON-SPECIFIC ORIENTAL ETC.
HEALTHY EATING CONCEPTS

BRITISH CUISINE
SOUTH EAST ASIAN
GASTRO PUBS
E.G. THAI, NOODLE ETC.
INDEPENDENT RESTAURANTS
PUB/BAR RESTAURANTS
FASTFOOD
BISTROS
LOCAL/TRADITIONAL FOOD
Allegra Strategies Analysis, Industry Research, 2009
Fig. 5.2 RESTAURANT BUSINESS MODELS EXPECTED TO GROW THE FASTEST OVER THE NEXT 3-5 YEARS
64%
13%
11%
8%
2%
1%
1%
0%
Fast casual
dining
Fast food
Pub
restaurant
Gastro pub
Fine dining
Brasseries
Other
Hotel dining
Source: Allegra Strategies Analysis, Industry Research, 2009
Based on a combination of
economic forecasts, past
performance and industry
executive interviews, Allegra has
produced a five year growth
forecast for the Informal Eating
Out market. A market value of
47.5bn is predicted by 2014, which
equates to a CAGR (Compound
Annual Growth Rate) of 3.4%. In
part due to the continuation of a
relatively low inflationary outlook,
this growth rate is expected to be
the lowest over the past 25 years.
Nevertheless, this market growth is
forecast to generate an estimated
increase in employment within the
sector of between 3%-5%.
Table 5.3 INFORMAL EATING OUT MARKET GROWTH, 1999-2014F
MARKET VALUE (BN)
CAGR - PREVIOUS 5 YR. PERIOD*
1999 2004 2009F 2014F

24.7
33.3
40.3
47.5
7.0%
6.2%
3.8%
3.4%
*Note: i.e. 1994 - 1999, 1999 - 2004 etc. Source: Allegra Strategies Analysis, 2009
Summary of Short and Long Term

Expectations by Market Segment
The following analysis
reviews the prospects of
each Informal Eating Out
market segment over the
short- and long-term.
There will, of course, be differences
with each segment in terms of the
abilities of different operators to
capitalise on more specific growth
opportunities, and this will play a
key role in determining segmental
winners and losers.
INFORMAL RESTAURANTS
Short-Term Prospects
- Further fall-out of independent
restaurants and weaker chains as
a result of the economic decline
particularly those failing to
provide value for money and/or
good quality food
- Margins will continue to be
squeezed as the consumer
discount junkie forces them to
keep up promotions and
discounts
- More experience will be gained
around their management of
promotions operators will be
more knowledgeable about which
tactics are better able to drive
footfall, repeat custom and higher
spend more profitably than
others
- Stronger justification of price
points and communication of
value messages
Long-Term Prospects
- There is a positive long-term
outlook, with stronger expansion
opportunities beyond the
South East
- There will be an increase in the

variety of cuisine types with
greater specialisation
- Rising demand for convenience,
good value and provenance by the
British public all play to the
strengths of informal resta-urants
particularly well-executed
brands
- Stronger growth to be seen in
some existing operators such as
Carluccios, YO! Sushi and
Wagamama, as well as an
emergence of new brands
- There will be more consolidated
ownership in the emergent new
brands
- Some brands in the middle
market, with no previous
recessionary experience, no strong
differentiation and who are poorly
managed, will fall out of the
market
- Operators will need to provide
clear points of difference as well
as something which is not readily
available to people at home
- Restaurants become more flexible
with their offer at different daypart occasions
- Ensuring newer customers are

attracted and retained, the fast
food chains will offer consumers
upgraded environments and
dining experiences
Long-Term Prospects
- Fast food and takeaway will have
to work hard not to fall out of
favour given the rise in healthy
eating and concern over food
origin operators will have to
become more transparent in order
to appease consumers of their
concerns
- Pace of growth in direct and
indirect competition (e.g. rising
supermarket competition) is
expected to exceed demand,
making life harder for takeaway
operators
- Fast food chains will have to
deliver a broader value for money
proposition
- New forms of healthy fast food
independents and chains will
emerge, with operators like Leon
already leading the way
- The provision of drive-thrus will
increase
COFFEE SHOPS/SANDWICH
BARS/CAFS
FAST FOOD AND TAKEAWAY
- Favourable takeaway prospects
over the next 18 months as
consumers remain price conscious
and continue dining in more
- Physical expansion opportunities
for the fast food brands with the
benefit of more advantageous
property deals
- Short dips in comparable store
sales growth due to the economic
and footfall declines
- Scaling back of physical expansion
- Some of the upper end deli and
sandwich bars will have to lower
prices to remain competitive as
the bar is raised by mass market
operators
Summary of Short and Long Term

Expectations by Market Segment
- The coffee shop operators will
start to offer more promotional
deals for customers
Long-Term Prospects
- Favourable prospects with ongoing trends to urban caf culture
and growth in branded food
concepts expected to continue for
at least the next five years
- There will be a greater blurring
between coffee shops and
sandwich bars in terms of the instore environment and experience
- Coffee shops will look to extend
their daypart offering
- Stronger expansion into smaller
towns and larger centre in-fill
with smaller formats
- An increased number of
convenience stores with
enhanced grab & go ranges
- Greater re-positioning to offer a

foodservice fit to rival informal
restaurants
- Grab & go sections to align closely

with local catchment areas
- There will be more segmentation

with different tiers within the pub
sector some pubs expected to
become restaurants
- Dine-in ranges to become a longstanding feature set to see

increased choice and wider
availability
- Stronger presence of hard
discounters into grab & go market
- Development of retail cafs into
free-standing caf concepts to
remain a low priority owing to
greater margin confidence in core
retail formats
PUBS
RETAIL GRAB & GO AND
CAFS
- Supermarkets will continue to fare
well during the recession, with
consumers opting for
supermarkets meal deals as part
of increased promotional activity
- Higher end product development
will be on hold as supermarkets
focus on volumes and price-led
activity rather than innovation
- Greater Focus on entry price point
ranges
Long-Term Prospects
- More impactful grab & go
displays with better
merchandising, positioning and
signage
- The variety and packaging of grab
& go food will develop further
83
- Difficulties on wet sales with
people choosing to drink at home
rather than out of home leading
to further closures and churn of
pubs across different operators
- The number of pubs selling food
will increase, making them a
cheaper alternative to dining at
restaurants
- More aggressive price-led
propositions to drive footfall
- Greater communication of pump
prices to portray stronger value
message on alcohol
- Favourable summer weather
offsets impact from weak
sporting calendar
Long-Term Prospects
- Pubs continue to struggle to
develop core alcohol sales and
greater efforts made to sell a
wider range of beverages
- Greater use of loyalty schemes to

encourage more regular visits
- There will be more effort made by
pubs on improving outdoor areas
WORKPLACE
- Further decline in footfall with
increased unemployment
- Impact from greater numbers
bringing in a packed lunch to save
money
- There will be greater promotional
usage
- Increased focus on healthy eating
initiatives
Long-Term Prospects
- Greater challenges in cost
effectively delivering greater
choice and customised solutions
- Caterers will be more mindful
about what is happening on the
High Street and become more
commercial, though unlikely there
will be a strong presence of
brands
- Greater consolidation big players
as well as niche high service
players will remain
- Increased focus by contract
caterers on widening their service
propositions
LEISURE
TRAVEL
- Reduced footfall through

recession has negatively impacted
foodservice within smaller leisure
venues, but staycation factor
benefits larger destinations
- Performance is heavily linked to

footfall and will remain under
pressure
- Theme park operators offering

poor value for money to lose out
- Greater use of promotional
activity to be employed
Long-Term Prospects
- Favourable prospects for
foodservice within leisure sectors
with strong grey market appeal
- More competitive prices and

special offers
- Better quality vending to be seen
across all travel streams
Long-Term Prospects
- More mobile units and standalone kiosks which take up less
floorspace will be used as
passenger numbers increase
- Greater focus on offering fresher

and healthier product choice
- There will be a greater branded

presence within stations, airports
and motorway service areas
- The discerning consumer expects

the same choice as they would on
the High Street, leading to a
greater presence of brands and
more variety for consumers
- The greater provision of

information for travellers in
airports and train stations will
reduce prevailing stress levels and
boost spending
- Leisure demand boost expected

from London Olympics and its
sporting legacy
- Benefits from upgrades to dining

and seating areas within travel
sites
Case study 1
Established and Emerging Consumer

and Societal Trends Shaping Informal
Eating Out
There are two main

drivers affecting
demand within the
Informal Eating Out
market consumer
trends and societal
influences. These two
trends divide into those
that are established
and those that are
emerging.
In terms of consumer trends,

value consciousness is a
relatively new phenomenon that
has emerged from the current
economic downturn. While the
UK economy will be in recession
for a finite period of time, value
consciousness is expected to
have a lasting effect and one
which operators will have to
adapt to not least in terms of
doing more to justify their
prices.
Authenticity can be defined in
terms of desire for greater
transparency and sensitivity
from the operator, not least in
terms of the sourcing,
seasonality and preparation of
product. This translates into
more information being required
about the origin of their
ingredients, a desire for products
which are sourced locally, as well
as greater transparency in the
actual making of the food, with
many restaurants now preparing
and/or cooking the food in front
of customers to help to create
an enhanced atmosphere.
85
Fig. 5.3 KEY CONSUMER AND

SOCIETAL TRENDS SHAPING
THE EATING OUT MARKET
ESTABLISHED
CONSUMER
TRENDS
Healthy Eating
Convenience
More Demanding
ESTABLISHED
SOCIETAL
INFLUENCES
Ageing
Demographics
Family
Fragmentation
Rising Obesity
The third key emerging consumer

trend affecting the Informal
Eating Out market is experience.
Consumers no longer just eat
with their eyes and with their
stomachs they also want to be
in an environment suited to their
needs and which offers them
something they cannot create at
home or elsewhere. For example,
if they are looking for somewhere
to read a book, they want to be
able to sit in a comfortable
environment; if they are looking
for somewhere to eat and
consume alcoholic drinks, they
might be looking for a fun, lively
atmosphere. It is these
experiences that will contribute
to the overall satisfaction level of
the customer.
EMERGING
CONSUMER TRENDS
Value
Consciousness
Authenticity &
Local Sourcing
Experience-led
EVOLVING
INFORMAL
EATING OUT
MARKET
EMERGING SOCIAL
INFLUENCES
Growing Ethnicity
Declining Levels
of Trust
More Online
Societal influences too are

contributing to changes in the
marketplace. The growing
ethnicity of the UK population is
leading to a far greater variety of
cuisine types. Improved
technology is leading to
developments in ordering food
and making the search, booking
and ordering process more
convenient for the customer
and it will continue to do so.
Consumers are also losing
confidence in a number of
organisations and authority
figures, and this is encouraging
them to be more selective and
wary about where they place
their trust. This is creating
opportunities for operators able
to capitalise on corporate
responsibilities.
Case study 2
Upcoming Brands
within the Informal
Eating Out Market
Branded chains are
going to take a greater
presence within the
Informal Eating Out
market.
The mega-trends present in

todays society are driving
opportunities for new,
innovative concepts to appear
on the High Street. Listed here
are a small number of operators
that have entered the market in
recent years and that offer a
unique selling point.
Jamies Italian
Jamies Italian offers authentic, affordable, good quality Italian
food. UK customers, of varying affluence, are able to enjoy
celebrity chef cooking on the High Street.
Leon
Leon is a quirky brand that has a differentiated
identity. It offers healthy and wholesome food, only
cooking with seasonal ingredients. Taste is not compromised.
Ping Pong
Ping pong offers light healthy, good tasting Asian food in an
informal environment it also offers unique and authentic teas
and cocktails.
Sacred
Sacred has brought the New Zealand caf experience to London
giving consumers gourmet coffee, including Flat Whites, herbal
tea and good food.
Tossed
Healthy food is at the heart of Tossed which provides
fresh salads which are made-to-order, giving
consumers choice, great tasting food and sizeable portions.
Vapiano
Vapiano is a new and entirely modern concept in fast casual,
offering made-to-order pizzas, pasta and salads along with a full
service bar.
Case study 3
Informal Eating Out Market

Scenario Envisaging
The diagram below
describes four different
scenarios all of which
are speculative
around the future of the
Informal Eating Out
market.
Arguably, the UK is currently in a
position where people are less
prosperous and therefore eating
out less. As a result, in the short
term, the market is characterised
by a number of business failures
as consumers seek better value
for money or, indeed, choose to

eat in rather than out.
Without question, the Informal
Eating Out market is set to grow
in the long term and it will move
out of its current mode of
Retrenchment and
Rationalisation towards a
brighter future. With longer
term economic recovery and a
strong feel-good factor, the
expectation is that a golden
period of Abundant Confidence
will return. This will be
characterised by a wider array of
cuisine genres, growth in format

types and innovation. However,
with more cocooning, perhaps
brought on by greater security
concerns and food scares, there
is the prospect of a stronger
focus on Home-based
Entertainment.
Clearly, whilst these scenarios
are speculative, they help to
outline how businesses need to
develop different tactics and
strategies for different
prospective market outcomes.
HOME-BASED
ENTERTAINMENT
Consumer: More traditional,
Discerning, Foodie, Likes
entertaining and Values-led
Market Implications: Polarising
market, Demonstration
of food and CSR values,
Growth of localised branding
and sourcing
MORE PROSPEROUS
Fig. 5.4 SUMMARY OF PROSPECTIVE EATING OUT SCENARIOS
LESS/STATIC EATING OUT
Market Implications:
Depressed trading conditions,
High business failures,
Growth in franchises, Local
and regional food focus
87
Market Implications: Growth

in niche and larger formats,
Global cuisine, Experience,
Service-led, Brand identity
and innovation
MORE EATING OUT
VALUE-LED EXPANSION
Consumer: VFM sensitive,
Promotion and convenience
hungry, High snacking
LESS PROSPEROUS
RETRENCHMENT &
RATIONALISATION
Consumer: Price conscious,
More self-reliance and
Limited eating-out repertoires
ABUNDANT CONFIDENCE
Consumer: Pleasure-seeking,
Youthful, Choice-hungry,
Customised and Pampered
Market Implications: More

consolidation, Growth in
price-led lower-middle
segment, Loyalty scheme
focus, Mobile marketing
Bibliography
Referenced Sources:
(1) Allegra Strategies, Mid-Year Market Update & UK Coffee Leader Survey, 2009
(2) Allegra Strategies, Senior Executive Top of Mind Survey, 2009
(3) Allegra Strategies, UK Restaurant Leader Survey, 2009
(4) British Beer & Pub Association: www.beerandpub.com
(5) CIPD Recruitment Retention and Turnover Report, 2008
(6) Confederation of British Industry, www.cbi.org.uk
(7) Ernst & Young ITEM Club
Eating
Out in
the UK
2009
A Comprehensive
Eating Out Market
(8) Department for Environment, Food and Rural Affairs (Defra), Family Food, 2007
(9) Food Standards Agency, Eat well, be well, How we used to eat
www.eatwell.gov.uk
(10) IGD, Shopper Trends, 2009
(11) NPD Group, CREST data, 2009
Disclaimer
Copyright: Allegra Strategies Limited,

July 2009
a. Consumer spend by IEO segment 2007-2009

b. Consumer spend per visit by segment, 2009
c.Daypart analysis, 2009
d. Eaten at home/out of home market shares, 2009
(12) Office of National Statistics (ONS)
a.ABI (Annual Business Inquiry), 2006
b. Consumer Trends Q1 2009: Household final consumption expenditure on
food and drink in and out of the home 1970-present day
c.Disposable income statistics 1970-present day
d. Labour Market Trends, 1996-present day
e. UK National Accounts: Input-Output Analysis, 2006
(13) Survey, The Buzz, 2008 (Hospitality and Catering Recruitment specialist)
www.bighospitality.co.uk
(14) The Grocer Magazine, May 2009
(15) The Soil Association Organic Market Report, 2009
Wider Desk Research:

(16) British Retail Consortium, www.brc.org.uk
(17) Caterer Search, www.caterersearch.co.uk
(18) An Appetite for Change, Food and Beverage 2012; Deloitte
(19) Euro-Chains, UK, A Restaurant Chain Monitoring Service, 2006/07 Base
Report; Gira Foodservice
(20) Family Spending and Family Surveys, 1997-2007; ONS
(21) Foodservice and Eating Out: An Economic Survey, January 2007; Defra
(22) Horizons FS Limited (Foodservice Data)
(23) Just-Food www.just-food.com
(24) Mintel Group (Foodservice Reports)
(25) Social Trends, 2008; ONS
(26) The Datamonitor Group (Foodservice Reports)
(27) UK Business: Activity, Size & Location, 2008; ONS
Corporate References
(28) Wide variety of foodservice operators within the IEO market, including: Burger
King; Carluccios; Greggs; Jamies Italian; KFC; Leon; Marks and Spencer;
McDonalds; Ping Pong; Pizza Express; Pret A Manger; Sacred; Tossed; Vapiano;
Wagamama; Whitbread Group, YO! Sushi
(29) NGOs and relevant bodies and associations, including: Fairtrade, Rainforest
Alliance, Red Tractor
All rights reserved. Use of this report is

for internal corporate use by
participants and client organisations.
No part of this publication may be
reproduced or stored in a retrieval
system, in any form or by any means,
electrical, mechanical, photocopying or
otherwise without the prior consent of
the publishers.
Great care has been taken to ensure
that all information contained in this
report is accurate and incorporates the
latest developments in informal eating
out trends in the UK sector. However,
Allegra Strategies can accept no
responsibility for any investment
decision made on the basis of this
information or for any omissions or
inaccuracies that may be contained in
this report. This report has been
produced in good faith and we trust
that the findings will be of significant
value to all readers.
Allegra Strategies Limited
No 1 Northumberland Avenue, Trafalgar
Square, London WC2N 5BW
Tel: +44(0)20 7691 8800 Fax: +44(0)20
7691 8810
Email: info@allegra.co.uk Website:
www.allegra.co.uk
Registered in England No: 3645920
Eating
Out in
the UK
2009
A Comprehensive
Eating Out Market

Eating Out in The UK, 2009

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Eating

By Steve Easterbrook, Chief Executive, McDonalds

Introduction & Background

Market Definition and Segmentation

The Scale of the Informal Eating Out Market

Market History and Evolution

Eating Out Mega Trends

The Future of the Informal Eating Out Market

Foreword by Steve Easterbrook,

Eating Out in the UK 2009

It also shows that the choices facing

As the market expands and

Only businesses which

Informal eating out has become an

Eating Out in the UK 2009

Consumers will spend on average

But, for the first time

The sector will bounce

But the recession will leave

The future of informal

This recession will mark a watershed

Healthy eating is a hugely

Operators will face greater challenges

Buying British, seasonality and

Eating Out in the UK 2009 4

Introduction & Background

SUB-CATEGORIES AND DESCRIPTIONS

Outlets serving food that

Burger King, KFC,

Coffee and food-focused

Costa Coffee, Pret A

Combination of cafs and

M&S Caf, Sainsburys,

Public houses and bars

Sit-down and grab & go

Includes locations where

Foodservice facilities for

Little Chef, Roadchef,

Source: Allegra Strategies Analysis, 2009

Eating Out in the UK 2009

2,000 household telephone interviews,

Analysis and review of existing eating out

30 interviews with senior executives across the

100 interviews with independent

Source: Allegra Strategies Analysis, 2009

Eating Out in the UK 2009 6

The Scale of the Informal

The size of the

Eating Out in the UK 2009

As of March 2009, 1.36 million

The Size of the

This is equivalent to average

Source: Allegra Strategies Analysis, ONS, 2009

Percentage change year on year

Source: Allegra Strategies Analysis, ONS, 2009

Eating Out in the UK 2009 8

The 2009 market value of 40.3

Fig. 1.3 THE VALUE OF THE INFORMAL EATING OUT MARKET AS A

14% 15% 16% 16% 17% 18% 20% 22% 22%

Source: Allegra Strategies Analysis, ONS, 2009

The Rise of the Informal

Eating Out in the UK 2009

Source: Allegra Strategies Analysis, ONS, 2009