The ethnic restaurants and takeaway sector is facing a number of challenges. The most obvious is reduced spending from consumers, who are being pressured by both the economic downturn and rising utility costs. However, the sector is also facing an acute crisis over staff numbers, after the government completely revamped its immigration policy in 2008, moving towards a more restrictive points-based system, which is penalising non-EU workers. In addition, inflation in global food prices is increasing input costs.

However, the sector does have a number of advantages. The first is that the UK’s taste for ethnic food, already the largest in Europe, is showing no signs of slowing down, helped by increasing levels of long-haul foreign travel, and changing food tastes. Meanwhile, a cultural shift towards eating out has occurred in the UK over the past 20 years, with consumers increasingly reluctant to give up this well-established leisure activity.

In this environment, there is much opportunity for innovative operators. The fragmented nature of the market, which is dominated by independent family-owned outlets, means that there is great scope for consolidation and the emergence of chains. This is happening most visibly in emerging ethnic cuisine’s, such as Thai and Japanese, which are seeing some strong brands develop. Meanwhile, the growth in healthy eating patterns is helping to drive some ethnic foods, which are seen as lighter and healthier than traditional British cuisine.

The hypothesis for this report is: How can ethnic restaurants increase their share of an expanding eating out market?

Main report themes:

Impact of the credit crunch?

Impact of rising food costs for operators?

Is the market seeing any further consolidation brand-wise, or is it still highly fragmented?

What impact do supermarkets have on this market, if any?

Are consumers getting more adventurous with their tastes?