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Premium chains lead restaurant market growth

Published:  14 February, 2024

According to Lumina Intelligence, the UK restaurant market reached a value of £18.6bn in 2023, spearheaded by premium branded establishments and menu price inflation.

High-end chain restaurants achieved a turnover growth of 7.7% in 2023. The market has witnessed a distinct polarisation, with premium brands such as The Ivy, Côte and Miller & Carter thriving while mid-market brands faced struggles. 

The report highlights that the overall restaurant market generated a 4.4% growth rate over the same period, although this is still behind pre-pandemic levels.

To boost profitability, restaurant groups have strategically rationalised their estates. Leading brands experienced a decline in estate size by a combined average of -2.6%, largely driven by mid-market chains undergoing estate restructuring to alleviate debt.

Seizing this opportunity, stronger operators such as The Big Table Group increased its acquisition activity, aiming to consolidate market positioning and expand its reach.

As reported by Harpers, there were 6,000 hospitality venue closures in 2023, bringing the total number of closures since the pandemic to nearly 23,000.

Figures from CGA also found that new openings in the sector reduced for the third year in a row in 2023. Since 2020, there have been just short of 12,000 new venue openings in the UK.

These closures are being largely driven by independents, while some managed groups have adapted to the challenging economic climate through acquisitions and mergers.

Meanwhile, Gaucho and M-owner Rare Restaurants has announced it will open 30 new sites following its double-digit revenue growth in 2023. 

Like-for-like sales were up by more than 20% for Rare Restaurants in 2023, despite significant investment in three new openings in Newcastle, Covent Garden and Cardiff.

However, the group did also close sites in Victoria and Canary Wharf, leaving only one site in London.

“We have seen brilliant growth in cities, towns and local neighbourhoods alike,” said Martin Williams, CEO of Rare Restaurants.

“With a pipeline of 30 UK locations, we will continue to grow our brands in a sustainable manner, which echoes our commitment to continue to offer our best-in-class menus,” he added.

Rare’s expansion stands to benefit from vacant venue space with 30 new sites in the company’s sights.