Business confidence continues to grow in the UK’s foodservice sector as more than two-thirds of operators report an increase in food sales year-on-year.
Just over one quarter (26%) report a large increase, while around half say they are serving more meals at the weekend than they did this time last year, according to the latest Eating Out-Look study by Horizons and JRA.
It also asserts that fewer operators are cost cutting this year compared to 2013, and a significant proportion of businesses have increased staff numbers (28%), with fewer having to cut staff hours or freeze wages.
“This is a really encouraging result and one that reassures us that recovery in the hospitality sector is well under way,” says Emma Read, Horizons director of marketing amp; business development.
“Our last operator survey [May 2014] showed that businesses were much more optimistic about future trading, with a third expecting increases in food sales. Six months on their optimism has been proved correct, with the majority of respondents reporting an actual rise in food and drink sales and confidence in the sector even higher.”
The report, which surveys 300 businesses across the market, including hotel, restaurant, pub and quick service operators, also reveals that fewer customers are trading down to lower priced meals, 22% this Autumn compared with 33% last year. At the same time operators report that the number of customers purchasing food using meal deals or promotions has dropped to 34%, compared with 41% a year ago.
In line with this, operators’ perception of average spend per head has increased significantly in 2014 with the number of consumers spending £12-16 rising from 12% [Autumn 2013] to 18% [Autumn 2014] and the proportion of customers spending an average of £6-12 dropping from 24% to 21%. Those perceived by operators to spend over £25 has risen three percentage points, from 10% to 13% in the same period.
Read adds that while this indicates that fewer meals deals and promotional offers are available, it also reflects the fact that the consumer mindset is starting to change. No longer is price as paramount as it once was and consumer confidence is returning.
Of the operators that took part in the survey, nearly 90% expect food sales to increase further over the next 12 months, with a quarter of those expecting large increases, significantly higher than in 2013.