Consumers are eating out more than ever, driven by increased disposable income
and the growing number of chain restaurants infiltrating the British high street. In this exciting time, Pragma asked where the opportunities are across England, and how restaurants should tailor their offer to regional differences
A growing space
Overall market growth is occurring at the expense of independent restaurants, visited by only 18% of consumers on their last meal out. Branded chains are the real winners, with one third of diners claiming to have eaten out at casual restaurants more this year, whereas fine dining appears to have only experienced increased uptake among Londoners.
Regional differences
The London market shows high levels of demand, with a younger and wealthier demographic reporting a slightly higher frequency of eating out and considerably higher monthly spend than the rest of England (£105 vs £69 per month).
However, in the competitive intensity of the capital, it will be the fight for real estate and rising rents that dictate the number of restaurant openings.
Outside London, there are great opportunities to be had, with diners in the North eating out as frequently as those in the South East at roughly 7 times per month.
Additionally, for mainstream fast casual concepts, there is relatively little difference in what consumers across England are prepared to pay – typical spend varies from £7.20 on a burger and chips or £8.40 on a pizza in the North, to £8.10 and £9.50 in the South East.
Trends
London diners are the most fickle, with many ‘foodie’ trends starting in the capital. For example, 1 in 20 London diners have eaten a cronut in the last 3 months, compared to just 1 in 50 in the rest of England.
Gourmet burgers, on the other hand, defy geographical boundaries and are popular across the board with 44% diners having eaten one in last 3 months. Moreover, examples such as Pitt Co Que (London) and Red’s True BBQ (Leeds) are testament to the potential of simple, meat-based concepts in any major city.
Choice drivers
Wherever you are, diners will tell you that quality of food is most important when choosing a restaurant. However, the further North you go, the more important décor and reliability become, perhaps justifying the high CAPEX of developments such as Manchester House.
In London, conversely, novelty and the desire to ‘try something new’ are more important than elsewhere, with a third saying it is ‘very important’ when deciding where to go.
Tailoring communications
Regional variation can have implications on pricing strategy, menu options and the way brands speak to their customers. Customers were asked to choose the three words they found most appealing of a list of 20 adjectives in order to unearth some of these nuances.
‘Homemade’, ‘traditional’ and ‘locally sourced’ are much more popular in Birmingham and Manchester (compared to London, Bristol or Bath), whereas ‘Modern’ is twice as popular in London.
Premium concepts are likely to hold more traction in London – notably, buzzwords ‘artisan’ and ‘organic’ are twice as appealing to diners in London as they are to those in the rest of England.
Whilst there is room to tailor some aspects, brands should ensure they continue to portray their core values wherever they are. Moreover, some concepts are universally appreciated: for example, ‘freshly made’ is the most popular descriptor across England, appearing in 69% of respondents’ top three. Operators communicating their ‘freshly made’ credentials particularly effectively are Pret A Manger in the Grab & Go sector and Pizza Express in Casual Dining with their ‘Simple. Fresh. And beautiful’ tagline alongside open kitchens.
Gauging the ‘softer’ elements
Helene Mills, Director, Pragma, comments : “Our work was prompted by questions posed by our clients, both investors and operators, looking to expand their concepts in the UK. Understanding of the ‘hard’ success factors, such as rents and population demographics, only goes so far in addressing a roll-out strategy.
“It is also important to gauge the softer elements, such as tastes, preferences and consumer mindsets, which also strongly influence the likely resonance of a food & beverage proposition. For example, there may be benefit in considering menu choices in light of pricing sensitivity, or communications to heighten appeal regionally.”
Source: Pragma Diner Survey 2014 (sample of 1000 across England, Nationally
Representative on entry, qualify on basis of having eaten out twice in the past month)
About Pragma
Pragma is a leading strategy consultancy specialising in retail and consumer markets. Established in 1988, Pragma turns insight into profitable results for its clients through a combination of bespoke research, rigorous analysis, and industry expertise. Pragma has delivered over 1,300 projects in over 30 countries and can apply its skills to diverse markets and sectors.
Pragma Consulting has worked on a variety of projects in the sector from proposition development and customer service optimisation to location planning and commercial due diligence. Pragma’s Food & Beverage clients include Pret A Manger, Nando’s, Pizza Hut, Hawksmoor and Gail’s.
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