UK retail-restaurant

UK retail-restaurant partnerships set to increase

Retail-restaurant partnerships that see restaurants situated in retail or grocery stores are not a new thing but could increase in popularity as the foodservice sector looks for new ways to survive the UK energy bills crisis, according to GlobalData.

In a possible sign of things to come, the Boparan Restaurant Group plans to launch its restaurant and takeaway brand The Restaurant Hub in 30 Sainsbury’s stores later this year.

According to GlobalData’s latest Foodservice Insights and Trends report – Restaurant Experiences Post-Covid 19 - a signifi cant proportion of global consumers frequent venues such as supermarket restaurants or cafés on at least a weekly basis.

The company’s latest Q3 2022 consumer survey also reveals that a quarter (25%) of Brits who state that they visit a supermarket café or restaurant once a week confi rm that they are making more frequent shopping trips but spending less each time as a result of the cost-of-living crisis.

Hannah Cleland, foodservice analyst at GlobalData, said: “There is clearly shopper demand for cafés and restaurants to be part of the shopping experience and the sharing of rent, utility bills, and associated overheads can help both businesses in a retail-restaurant partnership control costs better than they would be able to operating on their own. Partnering with retailers may provide some foodservice operators the respite they need from soaring energy bills and for retailers it will encourage more shoppers to opt for a quick bite to eat after the weekly shop in store rather than heading elsewhere.”

What makes this an interesting proposition in the midst of the cost-of-living crisis are the diff erent approaches consumers are taking to cutting back, observe GlobalData, whose research suggests that older generations are more likely to make more frequent but smaller shops as they are typically less willing to deviate from their usual routine and have more free time.

“It will be interesting to see how well retailers will be able to balance the quality and pricing of a branded restaurant off er with the ability of their cash strapped consumers to dine on a regular basis. People on a strict budget are least likely to dine on a regular basis whereas older generations remain prime consumers for supermarket restaurants,” added Hannah Cleland.

GlobalData’s market analyser highlights that full-service dining formats are struggling under the current economic climate compared to quick service (fast-food). In the UK casual and fi ne dining had sluggish value compound annual growth rates (CAGRs) from 2019 to 2022 of just 0.6% and -0.7% respectively, while quick service managed to grow by 1.9%, they report.

“Fast food style restaurants operating in retailers are likely to fare better than those with more pricier menus and if they can transfer overhead savings into menu prices, a stores high footfall will provide plenty of eager dinners,” said Hannah Cleland.

“Boparan’s deal shrewdly places its full-service brands such as Carluccio’s and Gourmet Burger Kitchen in a mid-priced supermarket like Sainsbury’s who follow a competitive pricing strategy rather than a price cutting policy. Generally speaking, with a higher disposable income Boparan’s off er will appeal to a Sainsbury’s shopper who may well decide to eat in store rather than forego dining out altogether.”

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