Confidence is coming back to the eating and drinking-out markets, CGA Peach’s exclusive annual Business Leaders’ Survey reveals. The poll of the UK’s top executives found that 90% are either very or fairly optimistic about the year ahead for their businesses, up from 78% at the same point last year.
Numbers feeling very optimistic have doubled, from 15% to 29%. Confidence is most bullish among younger business and those operating solely or largely in London; two in five (40%) here are very optimistic, compared to just one in six (16%) of those based largely beyond the M25.
2013 better than expected
2013 turned out to be better than many in the sector had feared. More than two in five leaders (44%) say their business performance in 2013 had exceeded their expectations—up from the third (34%) who said the same of 2012. Only one in eight (13%) says performance was worse than they expected last year.
Significantly, numbers optimistic about the market as a whole, and not just about their own operations, are up from 52% last year to 86% now.
Growing confidence supported by sales growth in December 2013 and January 2014
This growing confidence is backed up by figures from the Coffer Peach Business Tracker, which recorded like for like sales growth across major groups of 3.3% and 7.2% in December 2013 and January 2014 respectively. The latest data also chimes with several business surveys that suggest the economy may be returning to health after the prolonged downturn.
Tempering optimism
But the Business Leaders’ Survey, sponsored by Omnico, also reveals reasons to temper optimism for 2014. Half of leaders (52%) think real growth in disposable income is still a year to 18 months away, and another quarter (28%) estimate that it is further off still. Competition in the marketplace remains severe, so any substantial growth in 2014 may well arise from market share gains rather than organic increases.
Businesses also face challenges in 2014 from still-mounting property, energy and staffing costs. The Survey reveals widespread concern about all three this year—and hikes in food prices remain an issue too.
A turning point
CGA Peach’s Peter Martin says: “Our research over the last few years has consistently identified a flat, fickle and fierce market—of broadly static sales, scant brand loyalty among consumers and a rising intensity of battle between operators. But the Business Leaders’ Survey shows much more cause for confidence this year, and set alongside our Coffer Peach Business Tracker it provides cautious optimism that Christmas might have marked a turning point for casual dining, pubs and the wider out-of-home market. But it is clear that we are not out of the woods yet, and operators will have to be firmly on their mettle in 2014.”
Other key trends identified by CGA Peach’s Business Leaders’ Survey include:
• A rise in the viability of upmarket concepts: more than half of leaders (58%) thinking premium casual dining and fast food will thrive in 2014.
• Soaring popularity of transport hubs for restaurant and pub brands. Four in five (79%) think big stations and airports will be a growth hotspot this year.
• Barbecue concepts and craft beer: barbecue is tipped by half of leaders (50%) to make a big impact this year, and more than two thirds (68%) think craft beer will do the same. Upmarket pizzas and craft ciders are among other likely food and drink trends.
• Crucial importance of customer experience and staff engagement. Nearly nine in ten leaders (87%) identify each of them as major operational challenges in 2014.
• The challenge of keeping pace with change in technology. Taking full advantage of mobile and social media are particular issues, and the proportion of operators using data to drive consumer insight remains relatively low.
The Business Leaders’ Survey, sponsored by Omnico, drew responses from 172 senior executives. In-depth analysis of the findings can be found in the latest issue of Peach Report, out now. The full report is free to Peach Report subscribers and available to others to buy for £199. Email vicky.cooke@cgapeach.co.uk for more information.
About Omnico
Omnico Group helps businesses worldwide offer a complete retail experience, joining up stores, e-commerce and mobile, and providing a better understanding of the customer to drive engagement and loyalty.
Bringing over 20 years’ experience and forging the combined know-how of Digipos and Clarity, Omnico Group works with brands such as YO! Sushi and Pret A Manger to offer solutions that can be deployed rapidly and help to reduce total cost of ownership.
In hospitality, creating a great impression depends on far more than just the quality of food and beverage, or interior decoration and facilities – it’s the whole experience that customers will remember. At Omnico, intuitive solutions are developed, all of which can help clients to successfully perfect customer engagement while also effectively managing resources.