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Little Restaurant Brands Outgrow The Large

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New research shows that small but fast-growing casual dining brands are growing at around six times faster than bigger names, according to a recent edition of AlixPartners and CGA’s Market Growth Monitor.

Despite the market for new openings and sales remaining rather flat, Market Growth Monitor found that smaller restaurant brands (classified as those with less than 25 sites) achieved an increase in premises of 32% over the last three years. Medium-sized groups (those with 25 to 99 locations) have seen an even faster growth rate of 47.7%. This is in stark contrast to the 7.6% growth rate of large groups (those with 100 sites or more).

Casual dining brands breakout

These findings show how most of the new openings have come from brands that are breaking through the edges of eating-out into the mainstream. Perfect examples of casual dining brands pushing through the 25-site mark include Wahaca, Pho, Honest Burger and Bistro Pierrie.

In the last few years, there have been some industrious brands who have progressed to the next level of medium-sized operators, with desires to grow even larger. Such operators include Franco Manca, Las Iguanas and Byron. Such well-known eateries as Wagamama and Nando’s have also been increasing their site count too with Wagamama having some 129 restaurants across the UK and around a total of 140 globally.

London leads new dining concepts

But other restaurant brands have seen their growth strategies disrupted by these new upstart brands. Nowhere is this truer than in London, where new concepts in dining have a greater presence than elsewhere in the country.

London has seen small multi-site restaurant brands increase the number of properties by 37.8% since June 2014, and medium-sized brands by 67.8%. Large groups have seen a fall of 4.3%.

No matter what size a restaurant brand is, all are increasingly likely to find the near future a challenging and extremely competitive landscape to battle.  The rise in property rates, high inflation of food costs, and the continuing fallout of Brexit give those in the restaurant industry lots of areas to weather.

The landscape ahead

Perhaps it’s these hurdles that have hindered larger brands from expanding as much as they’d like, instead choosing to err on the side of caution, reducing the number of new openings or even closing some of the locations failing to make a profit.

But with so many fresh, inspiring new brands continuously taking on the restaurant industry, the sector will stay exciting, diverse and inventive.

If you’re a restauranteur looking to expand your offerings (no matter what the size of your outfit), then speak to Restaurant Property.

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