With an international team delivering insights to brands in over 40 countries around the world, we have our finger on the pulse of trends, particularly those with a global impact. Philipp Laqué, Managing Director for the UK at RMS, recently flagged such a trend, reported first in a presentation to the European Digital Foodservice Summit.
It appears that US brands are capitalizing on pandemic shifts to grow beyond the domestic market.
Most recently, McDonald’s announced it would open 50 units in the short term, Wendy’s announced it will build 400 UK units and Popeye’s opened its first London location in September, the first of a planned 350 units.
With much stricter COVID limitations and more severe labor and supply chain issues due to Brexit, it’s surprising that brands are flocking to the Empire.
On the contrary, notes Laqué. Companies’ balance sheets are strong, thanks to last year’s surge in QSR traffic, and Brits are more aligned with QSR’s offerings due to pandemic-created habits of adding carry-out or takeaway and dining at home.
Location. Location. Location.
Available real estate is also a factor — 8% of all UK restaurants closed (10,000 units, roughly) as of the end of Q2, unlocking prime locations in highly desirable areas.
The closure of so many fast-casual restaurants during the pandemic, created an abundance of desirable real estate opportunities, especially on the high streets. “The restaurant industry is facing a period of consolidation and adjustment in which fit and healthy operators are pushing for growth at the expense of struggling brands,” said Laqué.
The booming UK takeaway sector is also an incentive to move across the pond, a trend that will continue as people continue to work remotely.
In our summer survey of UK consumers, 43% reported they are working from home and 61% of UK consumers say convenience is the deciding factor when choosing a restaurant. This behavior factors well for the take-away segment and will continue to drive demand to areas outside the city centers.
The fate of London restaurants
Overall, Laqué projects a more optimistic future and agrees with predictions that the UK will experience a complete recovery of the out-of-home (OOH) market by the end of 2022. “Consumers are ready for “hedonistic experiences,” said Laqué, “with good food and socializing being the main motivators to visit restaurants.”
The pandemic formed new consumer eating out behaviors that will change the landscape of the UK restaurant industry in the long term. RMS remains at the forefront, delivering insights and data to restaurants around the world. Whether you’re expanding globally or managing your own domestic market, contact us today for data-driven solutions that optimize sales, menus and profitability.