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Quality drink offer increasingly important in tough casual dining market

Published:  01 March, 2019

The perceived quality and value for spend delivered by operators in the casual dining market is the strongest driver both of customer retention and new footfall, according to on-trade insights consultancy CGA.

Speaking at the Casual Dining show in London, CGA client director Fiona Speakman described a tough market, with saturation peaking in 2017, but one that is now levelling off in terms of churn of sites and closures, with “pubs holding steady, but the restaurant market still being eroded”.

The upside, said Speakman, is that research shows that consumer confidence is now holding steady, while just 29% of business leaders are concerned about market saturation in 2019, compared with 40% in 2017 (from CGA’s Business Leaders survey, releaesed yesterday at the show).

And while the above statement regarding the food and drink offer may seem a trifle obvious, CGA research has also found that many operators have in fact been lowering the quality of the food and drink offer in the face of tough competition.

“In short it is a really tough market, but there is opportunity for growth,” said Speakman, while stressing that, “brands delivering value for money and quality are performing quite well.”

Thus the quality of the food and drink offer has become ever more important in drawing customers in, including first time customers - a point Speakman highlighted with the revelation that some 50% of JD Wetherspoon customers consider themselves to be ‘foodies’.

“JD Wetherspoon is at the value end of the market, so what does this tell us about consumers at the premium end of the market?” was the question posed by Speakman.

“There is no doubt that the bar is already set very high”, she said, adding, “31% of consumers are driven to a brand for the quality of the food and drink experience”.

This rises with potential first time customers, of whom a majority now compare food and drink offers online before setting off on a night out, meaning that those consumers will prejudge and if they don’t like what they see they will not set foot through the door.

In terms of spending, some 28% of consumer said that they are driven to a brand by real value for money (rather than low cost), up 9 percentage points vs Oct 2016, while 31% are also driven to drinks-led outlets on the perceived quality of the drinks experience.

“What we are seeing in the data is that the quality of drinks plays a real role in bringing consumers in as well and it’s growing in importance, so drinks have a pivotal role [in bringing in new consumers]”, said Speakman.

CGA’s Business Leaders survey also highlighted that the trends towards healthier food, along with the growth of vegetarian and vegan diets, is translating to the drinks side of things too.

“Our survey is seeing the growth of no and low alcoholic beverages too, so alcoholic drinks are important, but it’s interesting to see that health macro-trend impacting on the range of drinks as well,” Speakman concluded.