UK Restaurant Industry

Due to the cost of living crisis and staffing constraints the restaurant sector is struggling, but research shows that the UK restaurant industry is recovering and becoming stronger.

Whilst there are still difficulties such as navigating through a cost of living crisis, research shows that the UK restaurant industry is recovering and becoming stronger. We’ll outline some trends within the industry and how you can adapt your restaurant to have the best chance of success in 2023. 

Key Statistics of the UK Restaurant Industry:

  • The Guardian reported in 2022 that UK restaurant insolvencies had jumped by 64%
  • More than 1 in 20 businesses in the sector (6%) planned to stop trading for two or more additional days a week in the month.
  • Around 2 in 3 (64%) UK adults said despite the cost of living crisis, they would find it difficult to stop eating and drinking out
  • 45% of hospitality operators in the UK have been forced to cut capacity or opening hours due to shortages in staff
  • 72% of consumers said price is now a priority for them whenever they eat out
  • Food and drink make up the bulk of what is posted on social media, being mentioned 33% of the time across all platforms
  • The hashtags #food and #foodporn continue to be the top hashtags on Instagram and TikTok in 2022
Restaurant industry

Restaurant Industry Outlook

The cost of living crisis has seen prices soar leading to many high street meals, snacks and drinks following suit, some by as much as 26%. UKHospitality which represents about 740 companies, says food businesses are struggling with inflation of about 18% on their total costs, from food to energy bills. Therefore, many businesses have had no choice but to increase their prices. This is seen by Nando’s price for a half chicken has increased from £6.75 to £8.50 (up 26%). Also, McDonald’s announced in July 2022 that it was rising the price of the cheeseburger from 99p to £1.19 (a 20% rise). Many foodservice businesses see menu price rises as inevitable as the industry is forced to pass on costs to their customers. To the extent that, 47% of restaurants will increase prices charged to customers by over 10% this year. 

restaurant industry

Navigating your restaurant through a recession economy

As we’ve outlined previously, recovery from COVID and the cost of living crisis has meant that this is a turbulent period for restaurants, so navigating through and withstanding the storm are vital for your restaurants success. Customers in 2023 will be looking for ways to reduce their spending and that could be down trading, or looking to maximise the value of their experience such as, trying something special that truly stands out to them.

Customers are likely to not eat out as frequently as they used to, so making these occasions, unique, is important. Your restaurant should appeal to these groups, this can be done by group deals or events. This could be offering themed nights like Mexican Night or Fish Friday. A perfect pairing for ‘Fish Friday’ would be SuperCrunch Chunky Fries, with a homemade look and staying crunchier for longer due to Aviko’s secret coating, they’re the perfect addition to your restaurants battered fish.

Another option for your restaurant would be to improve your midweek lunch offerings. As more people are now working from home, they will be inclined to visit a restaurant at lunch, so they aren’t in the same room all day. Therefore, ensure your restaurant has a good lunchtime offering or deal to tempt them to eat there. 

An important factor to help your restaurant thrive in 2023 is ensuring you’re getting the most out of social media. Start by assuring that you’re showing off your menu on your social media accounts. People are more inclined to scroll through photos and videos rather than articles and text. Therefore, highlighting and posting images of your best dishes from your menu will achieve better engagement. Additionally, you can use social media to collect feedback and reviews. 54% of social browsers use social media to research products. So, more customers are looking to social media for reviews and insights about restaurants. This means you should keep in touch with customers through comments and messages to potentially learn how you can improve and better your restaurant.

UK restaurant industry

Staff Shortages & Retention

Staff shortages have been a difficulty the industry has faced since COVID, and it has still not recovered. Whilst it’s always been vital to focus on your staff, during today’s climate its more important than ever. A great option for restaurant owners and managers to improve employee retention is to place emphasis on recognition. Everyone wants to be recognised for the job they do and feel like a valued member of the team. Simple practises like this can go a long way to making your staff feel respected which is likely to lead to increased loyalty among your team.

Another method of tackling staff shortages and improving retention is to introduce an employee incentive programme. This can include setting challenges and tasks that employees complete to win prizes. A perfect option for this would be to relate them to your business goals, maybe you want to sell more sides alongside dinner meals. Therefore, the employee that sells the most sides in addition to a dinner meal will win a prize. Both of these relatively simple practises focus on retaining staff in order to tackle the current staffing crisis. Adopting this philosophy of respecting and caring for your employees will likely help your restaurant cope through this challenging time.

Pure and Rustic Fish and Chips

Deals & Novelties (entice customers in)

Moving into 2023, consumers will most likely need some sort of incentive to be attracted to your restaurant. This doesn’t have to be price related, for example offering the cheapest food menu items compared to the competition may not be beneficial in the long run. Focus on offering something different and unique. This could be a set menu that’s only available at lunch, so could be priced slightly lower. Or potentially sharing boards that are unique to your restaurant, combining flavours and products that you wouldn’t normally see together. Try Aviko Habanero Cheese Nuggets and Chilli Cheese Nuggets as part of the sharing board to add some spice and flavour that’ll excite your customers. Having themed nights is also a great solution to create excitement and a reason to visit. Obviously, these themed nights need to be tailored to the cuisine your restaurant offers. But doing this will create intrigue among your customers and create a conversation which could lead to more people talking about your restaurant.