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Fast food and takeaways may benefit from the recession

Fast food and takeaways may benefit from the recession

While some sectors of the catering market are currently facing some of the most difficult trading conditions they have encountered for many years, the fast-food and takeaways sector may see some benefits from the economic slowdown in the UK. Catering Market, a new Market Review from market intelligence provider Key Note, examines the impact of the recession and other trends on the market sectors that make up the catering industry.

Due to its product appeal and ‘value-for-money’ positioning in the market, the fast-food and takeaways sector may be better placed to weather the economic recession in the UK than some other segments of the catering market. Indeed, confidence is such that a number of the leading companies in the fast-food sector have announced that their outlet expansion plans will be maintained in 2009. Fast-food chains may also gain from people tightening their metaphorical belts by attracting consumers who are trading down from the casual-dining outlets.

Key Note’s Market Review found that growth in catering sales was recorded in all sectors of the catering market in 2008. Fast food and takeaways exhibited the highest annual growth rate, at 4.5%; licensed clubs recorded the lowest annual growth rate, at 2.1%. In overall terms, the UK catering market increased in value by 3.8% to reach £33.84bn at current retail selling prices (rsp) in 2008.

Within the pub-restaurant sector, the economic downturn has affected consumer confidence and heavy discounting in the off-licence trade has encouraged consumers to stay at home. The business environment for operators in this sector may well become even more challenging in 2009, as the full impact of rising unemployment, increasing negative housing equity and continued high levels of consumer debt is felt.

Contract caterers and foodservice management companies are hopeful that more companies will now outsource their catering requirements, rather than provide them in-house, in order to reduce costs and help them to survive the downturn. Key Note forecasts that the sectors of the market that will perform best in 2009 include those of fast food and takeaways; holiday camps and villages; caravan and camping sites. By contrast, restaurant sales may decline a little compared with 2008, while catering sales through licensed clubs are expected to remain static.

Key Note identifies an increased focus on value meals by operators such as the pub-restaurant chains as being a future trend. Continued significant declines in on-trade beer volumes and a contraction in the eating-out market, in line with decreases in disposable incomes, will lead operators to increase promotion of value meals in order to maintain sales.

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