This regional briefing examining Full-Service Restaurants (FSR) in Western Europe arrives at a timely moment. Full-Service Restaurants are emerging from the pandemic, which had a huge negative impact, but the recovery is facing several other major challenges. This briefing examines the performance of Full-Service Restaurants over 2017-2022, analyses different types of FSR and looks at the largest brands. It also explores key trends within the category and assesses prospects for the future.
This report comes in PPT.
While some challenges to the category were present before, the onset of the pandemic in 2020 severely affected full-service restaurants (FSR) across Western Europe. Sales fell drastically during the year, and while some recovery was seen in 2021 and 2022 as restrictions lifted, a full return was certainly not seen. Transaction numbers fell markedly given limits on movements, and outlet totals also reduced with many chained and independent FSRs unable to survive the pandemic and the connected economic difficulties.
Although issues stemming from COVID-19 fell away in 2022, other factors meant a challenging operating environment still purveyed throughout the region. Labour shortages and changing demographics of workers, the hybrid model of working, rising operating costs, a difficult economic situation for consumers and the threat posed by limited-service restaurants (LSR) - given the advantages they can bring to customers - all meant FSRs faced a precarious situation.
The pandemic encouraged several trends to come to the fore. Shares of sales occurring in the home delivery and takeaway channels have remained strong compared to pre-pandemic levels. Healthier diets have heightened focus, as does meal personalisation, and the incorporation of sustainable and local ingredients, as well as technology, is also developing. The creation of a memorable experience when at a restaurant has also become more important for customers.
A recovery back to pre-pandemic levels in terms of sales, transaction and outlet numbers is not expected to be seen by 2027. Although all FSRs will see retail sales grow between 2022 and 2027, this represents a recovery from the drastic falls in 2020. Middle Eastern FSRs are expected to perform the most positively of all FSR types. But crucially, a return to 2019 sales levels will not be seen.
Consumer foodservice is composed of cafés/bars, full-service restaurants, limited-service restaurants, self-service cafeterias and street stalls/kiosks.
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