Burger and Chicken Restaurants - UK - August 2015

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Burger restaurants
Figure 1: UK burger bar market, value sales and forecast, 2010-20
Chicken restaurants
Figure 2: UK chicken bar market, value sales and forecast, 2010-20
Companies, brands and innovation
Burger King enters the home delivery market and launches new store design
McDonald’s introduces touchscreen technology and trials table service
KFC rolls out new store format
The consumer
Two thirds of Brits eat at fast food restaurants
Figure 3: Fast food outlet/restaurant usage, May 2015
A tenth of 16-34s have switched from fast food to gourmet burger restaurants
Figure 4: Eating behaviours at fast food restaurants, May 2015
Meat quality is of most concern to older consumers
Figure 5: Concerns around eating at fast food restaurants, May 2015
Thicker meat patties garner widest diner interest
Figure 6: Chicken/burger bar menu enticements, May 2015
Scope for chicken thigh to be used more widely
Figure 7: Attitudes towards chicken and burger restaurants, May 2015
McDonald’s is seen as most child-friendly of selected foodservice brands
Figure 8: Correspondence analysis of qualities associated with selected fast food venues, May 2015
What we think
ISSUES AND INSIGHTS
Operators must do more to engage their slower-growing core user group
The facts
The implications
Digital technology may help operators to improve speed of service
The facts
The implications
More scope for chicken thigh on fast food menus
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Growth of core 15-34-year-old user group forecast to slow down
Increase in real incomes not necessarily a good thing for fast food
National Living Wage introduced
Slower growth forecast for the total burger and chicken bar market
Continued expansion of ‘better burger’ restaurants will boost value of burger market
Non-specialists threaten to encroach on chicken operators’ heartland
McDonald’s and KFC implement changes
SEGMENT PERFORMANCE, MARKET SIZE AND FORECAST
Burger and chicken market is in rude health
Healthy but tempered market growth expected in 2015-20
Category blurring should continue to benefit the market
Figure 9: UK chicken and burger bar market, value sales, 2010-20
Figure 10: UK chicken and burger bar market, value sales and forecast, 2010-20
Continued expansion of ‘better burger’ restaurants should boost the value of the burger sector
Figure 11: UK burger bar market, value sales, 2010-20
Figure 12: UK burger bar market, value sales and forecast, 2010-20
Chicken continues to benefit from strong value-for-money perceptions
Leading chicken operators innovate
Chicken bar segment under pressure from other foodservice sectors
Figure 13: UK chicken bar market, value sales, 2010-20
Figure 14: UK chicken bar market, value sales and forecast, 2010-20
MARKET DRIVERS
Dining out is a key discretionary spending area but consumers’ frugal mentality remains
Figure 15: Consumer spending priorities (after bills) – dining out, November 2009-April 2015
National Living Wage is set to be introduced in the UK in 2016
The medium-rare burger debate
Core user group set for stunted growth
Figure 16: Trends in the age structure of the UK population, 2010-15 and 2015-20
KEY PLAYERS – WHAT YOU NEED TO KNOW
Burger/chicken restaurant operators further blur the boundaries
Burger King launches home delivery
Operators look to pulled pork/chicken for inspiration
KFC expands menus into new areas
McDonald’s ranks top for trust amongst selected fast food restaurants
Burger King unveils new outlet design
MARKET SHARE
McDonald’s retains an unassailable lead by store numbers
Figure 17: Selected leading burger and chicken restaurant chains, by outlet numbers, 2012-15
McDonald’s UK reports “positive” performance despite global woes
McDonald’s plays up the social aspect of its restaurants
McDonald’s looks to modern technology to boost appeal
KFC Q2 2015 sales rise 6%
KFC’s store design should increase its competitiveness
Figure 18: KFC’s store redesign, Bracknell store, November 2014
Burger King introduces home delivery
New store design unveiled for Burger King
Figure 19: Burger King’s store redesign, Paris store, August 2015
Figure 20: Burger King’s store redesign, Paris store, August 2015
Gourmet burger restaurants continue their march on London and beyond
Figure 21: Selected ‘better’/’gourmet’ burger operators in the UK market and planned/reported/projected outlet expansion, July 2015
LAUNCH ACTIVITY AND INNOVATION
Burger King UK trials home delivery service
KFC launches Toasted Burritos
Fast food operators look to American food trends
Fast food operators upgrade their cold drinks ranges for summer 2015
BRAND RESEARCH
What you need to know
Brand map
Figure 22: Attitudes towards and usage of selected restaurant brands, June 2015
Key brand metrics
Figure 23: Key metrics for selected restaurant brands, June 2015
Brand attitudes: GBK’s different proposition is thought of as worth paying more for
Figure 24: Attitudes, by brand, June 2015
Brand personality: Chicken Cottage has the most negative associations
Figure 25: Brand personality – macro image, June 2015
Big brands are noted for tradition, family-friendliness and convenience
Figure 26: Brand personality – micro image, June 2015
Brand analysis
Gourmet Burger Kitchen has lots of potential to grow its customer base
Figure 27: User profile of Gourmet Burger Kitchen, June 2015
KFC ranks highest for recommendation
Figure 28: User profile of KFC, June 2015
McDonald’s continues to benefit from ubiquitous presence and uniform experience
Figure 29: User profile of McDonald’s, June 2015
Burger King may be falling behind McDonald’s and faces new competition too
Figure 30: User profile of Burger King, June 2015
Chicken Cottage falls down on awareness and lacks in association with positive traits
Figure 31: User profile of Chicken Cottage, June 2015
THE CONSUMER – WHAT YOU NEED TO KNOW
Two thirds of Brits eat at fast food restaurants
16-34s are key users of fast food restaurants
More users limit fast food consumption due to concerns over healthiness than order healthier dishes
Meat quality is the top concern amongst users
Animal welfare is still a major concern despite efforts to reassure diners
Thicker meat patties garner widest diner interest
Less than half of consumers view service in selected fast food venues as speedy
FAST FOOD USAGE HABITS
Two thirds of Brits eat at fast food restaurants
Younger consumers more likely to use any fast food restaurant
Figure 32: Usage of any fast food outlet/restaurant, by age, May 2015
McDonald’s continues to dominate the market
Figure 33: Fast food outlet/restaurant usage, May 2015
EATING BEHAVIOURS AT FAST FOOD RESTAURANTS
16-34s, fast food core users, are an area of concern for mainstream operators
More users have limited the amount of fast food they eat than have ordered healthier dishes
Figure 34: Eating behaviours at fast food restaurants, May 2015
USER CONCERNS OVER FAST FOOD
Further reassurance over meat quality could help attract older diners
Animal welfare
A significant minority of users are concerned over the health of fast food
Figure 35: Concerns around eating at fast food restaurants, May 2015
CHICKEN/BURGER BAR MENU ENTICEMENTS
Thicker meat patties garner widest diner interest
One in four fast food users are interested in burgers made from unusual meats
Fish/shellfish could help operators appeal to older diners
One in four diners are interested in a greater selection of burger toppings
Figure 36: Chicken/burger bar menu enticements, May 2015
ATTITUDES TOWARDS FAST FOOD OUTLETS
Letting diners design their own sauces could add interest to eat-in venues
Scope for wider use of chicken thigh on fast food menus
Figure 37: Attitudes towards chicken and burger restaurants, May 2015
QUALITIES ASSOCIATED WITH SELECTED FAST FOOD OPERATORS
Just one in four consumers view service in KFC as speedy
McDonald’s seen as the most child-friendly of the selected operators
McDonald’s seeks to address preconceptions over what’s in its burgers
Figure 38: Correspondence analysis of qualities associated with selected fast food venues, May 2015
Figure 39: Qualities associated with selected fast food venues, May 2015
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research
APPENDIX – MARKET DRIVERS
UK population age structure
Figure 40: Trends in the age structure of the UK population, 2010-20
APPENDIX – SEGMENT PERFORMANCE, MARKET SIZE AND FORECAST
Forecast methodology
Best- and worst-case forecasts
Figure 41: UK burger and chicken bar market, value sales, best- and worst-case forecast, 2015-20
Burger bar market
Figure 42: UK burger bar market, value sales, best- and worst-case forecast, 2015-20
Chicken bar market
Figure 43: UK chicken bar market, value sales, best- and worst-case forecast, 2015-20
APPENDIX – MARKET SHARE
Historic financial performance of selected leading fast food operators
McDonald’s
Figure 44: Key financials for McDonald’s Restaurants Limited, 2009-13
KFC
Figure 45: Key financials for Kentucky Fried Chicken (Great Britain) Limited, 2007/08-2012/13
Nando’s
Figure 46: Key financials for Nando’s Chickenland Limited, 2008/09-2013/14
Wimpy
Figure 47: Key financials for Wimpy Restaurants Group Ltd, 2009/10-2013/14
APPENDIX – BRAND RESEARCH
Advertising expenditure
Figure 48: Recorded above-the-line, online display and direct mail total advertising expenditure on selected fast food brands, 2011-15
Nielsen Media Research – methodology
Brand map
APPENDIX – QUALITIES ASSOCIATED WITH SELECTED FAST FOOD OPERATORS
Correspondence analysis