The restaurant sector in the UK is set to face some difficult challenges over the next 12 months. With rising food bills, an increase in staffing costs due to the living wage and business rates looking to be put up, rather than down, several chains are facing considerable challenges. The industry has an intense amount of competition and within this context there are always likely to be winners and losers. Recently both Jamie’s Italian and Strada have announced retrenchment strategies and the restaurant group that owns chains such as Frankie & Benny’s, Chiquito and Garfunkel’s have reported that like-for-like sales are down 3.9% on last year.
The industry is facing many external pressures, but it can also represent a large opportunity for new start-ups to enter the market and offer something new. For example, the company behind Las Iguanas and the Turtle Bay chains launched their restaurants during the last recession. While risky, it meant that costs were considerably lower and by offering something different to what was on the high street at the time, they could establish a foothold in the market. Therefore, while it looks likely that some of the more established brands might not be so prominent in the future, the chances are that you will still have plenty of choice, even if the profit potential of these firms is not as strong as it had been previously.
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