The recession has proved to be a considerable force for the UK eating out market: there was a 32% rise in restaurant businesses going to the wall in 2008 whilst consumer research for this report has found that a quarter of consumers (mostly families) state that the recession has had a major impact on their eating out habits, forcing them to reduce both frequency of visit and expenditure. It is this reduction in cash flow which has been so deadly for businesses with heavy debt structures.

However, it is not all doom and gloom for the market as some players have been well positioned to even benefit from the current economic climate: eg Domino’s continues to meet demands for convenience as well as tapping into those consumers who are trading down, whilst the low-cost pub operator, JD Wetherspoon’s has also posted positive sales. Indeed, consumer research for this report shows that only around one in ten consumers are picking up more in-home meal deals (eg M&S Dine in for £10) instead of eating out. Furthermore, around one in five adults state that they have been unaffected by the economic downturn, whilst a further one in five state that they have felt the effects but that they’re pretty manageable and have therefore not really altered their eating out habits.

There is no getting away from the fact that the recession has forced the eating out market to contract, and with operators increasing reliance on the discount culture there is expected to be further damage to the market going forward. However, eating out is now such an established part of the consumers lifestyles that going out (eg cinema, pub) and dining out remain consumers top two spending priorities after bill payments, bringing emphasis to the point that cutting back does not mean cutting out.

The focus of this report is based on the following hypothesis: Winners and Losers in the Recession – whilst some operators are better placed to ride out the recession and even benefit from it, others are struggling to survive.

Main issues

This report seeks to:

Identify winners and losers in the eating out market as consumers cut back during the recession.

Investigate operators’ strategies to increase sales and encourage repeat business in the present economic climate.

Discover who the key target audiences are in the various eating out sectors and establish how best to meet their needs.