In this issue
Political, Social & Economic Trends
QSR Sector
Casual Dining Sector
Contract Catering Sector
Travel and Leisure Sector
Pub Sector
Wholesale and Manufacturing Sector
Trend of the Week
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Main Articles
Political, Social & Economic Trends

Housing costs double over 60 years but spending on food halves

The share of UK family budgets devoted to housing costs has more than doubled during the past 60 years, while the proportion going on food and clothing has halved, according to Britain’s statistics agency. Data published by the Office for National Statistics on Thursday also showed that UK household spending in the year to March 2017 — at £554 a week on average — exceeded its pre-financial crisis level for the first time.

Source: Financial Times, 19th January


UK inflation rate slips to 3% as effect of weak pound wanes

The squeeze on British household budgets showed signs of easing in December as the rate of inflation fell for the first time in six months, helped by lower airfare costs and a fall in the price of games and toys. The consumer price index fell to 3% last month from a five-year high of 3.1% in November, raising the prospect that inflation may have peaked, easing some of the pressure on UK consumers.

Source: The Guardian, 17th January


High street giants vow to cut sugar levels by 20%

High street chains, including Costa, McDonald’s and Greggs, are promising to slash the use of sugar and change the face of eating out. The firms have signed up to a code of practice including a pledge to cut sugar in their food and drink by 20 per cent by 2020. This will mean a change to the recipes of many products and the addition of new low sugar items to menus.

Source: The Daily mail, 17th January

QSR Sector

Tough trading conditions hit sales at Costa

Third quarter results to the 30 November, from Whitbread show underlying sales fell at its Costco coffee chain, with group blaming falling consumer confidence across the UK. Whilst new stores drove up Costa’s total sales in the UK by 7.2%, like-for-like sales fell 0.1%. The group said the well-publicised weak retail market footfall is negatively impacting its high street stores and this was expected to continue for some time.

Source: Kamcity; Namnews, 18th January


Whitbread fuels Costa coffee spin off talk as sales stagnate

The boss of Whitbread today fuelled speculation the company could spin off Costa coffee chain under pressure from a US activist fund. Alongside stagnant results, Whitbread’s chief executive Alison Brittain responded ambiguously to overnight calls by Sachem Head to spin off the business.

Source: The Daily Telegraph, 19th January


Nando’s to trial smaller “nino” format

Nando’s is trialling a new smaller format, which has been designed to appeal to consumers looking for delivery, take away, a quick bite with friends or simply a faster, “on the go” experience of the brand. Called Nando’s Nino, the first site under the new format, which is aimed at providing “new Nando’s occasions” that fit in with consumers’ increasingly busy lifestyle, opened this week in Twickenham. If successful, Nando’s will look to roll out the new smaller format to areas where its c400–strong estate currently doesn’t reach but the demand for eat in and delivery is still strong. 

Source: MCA, 18th January

Casual Dining Sector

Fatburger to launch in Scotland

Fat Brands, the global restaurant group, has signed a development deal with FB Scotland Ltd to open three co-branded Fatburger and Buffalo’s Express restaurants across Scotland in the next five years, the first of which is planned for Dundee. Last October, the company signed an agreement with Charlie FB Ltd, to open 15 co-branded Fatburger and Buffalo’s Express sites across the UK.

Source: MCA, 19th January


Closures on menu at Jamie’s Italian

Further closures are on the menu at Jamie Oliver’s restaurant business amid speculation that the television chef may be forced to consider a company voluntary agreement. A spokesman confirmed that it was considering a further restructuring of Jamie’s Italian in Britain, on top of the six restaurant closures announced a year ago. Those closures reduced the chain from 42 sites to 36, another has closed since, sending annual pre-tax profit stumbling from £2.4 million to a loss of £9.9 million after a one-off hit off £10.9 million.

Source: The Times, 13th January


Tortilla see lfls growth of 7.5%

Tortilla, the Californian burrito and taco restaurant group, has reported that company sales increased 20% to £30.4m last year, with restaurant like-for-like sales up 7.5%. The Quilvest-backed company, which currently operates 39 locations launched across the UK and Middle East, launched a smaller format model site in Putney last year aimed at residential areas, prompted by the growth of the delivery side of its business.

Source: MCA, 19th January


Preto to launch Chelmsford site, first of four openings in 2018

Brazilian rodizio brand Preto is to open a site in Chelmsford with plans to add three further restaurants this year. Preto launched its first site in London’s Victoria in 2007 and currently has ten sites in the UK. The concept features all-you-can-eat dining with customers paying a fixed price and using a two-sided disc to control the pace of their meal. The green side indicates to the waiter to serve more meat, while the red side indicates a pause. Lunch and dinner menus feature an unlimited serving of up to 15 different cuts of spit-roasted meat, slow-roasted over an authentic Brazilian barbecue. The meat is then presented on skewers and carved fresh at the table accompanied by salad, rice or pasta.

Source: Propel, 19th January

Contract Catering Sector

Carillion falls into administration

British facilities management and construction services company, Carillion has fallen into administration. Lenders have refused the £300m loan which was required to keep the firm afloat. The company provides full facility management services worldwide, including catering in the UK, serving 32,000 meals per day at 900 schools, and hospital meals. In Mid-December, Carillion agreed to sell a large part of its UK healthcare facilities management business to Serco for £47.7m.

Source: The Times, 15th January


Amadeus wins £2.5m catering contract for Stratford-on-Avon Racecourse

Amadeus has secured a contract with Stratford-on-Avon Racecourse worth £2.5m to provide exclusive catering services at the venue on race and non-race days. The five-year contract will see Amadeus run all retail and hospitality catering at fixture race events along with providing conference and banqueting catering at the venue taking place on non-race days. This new win adds to Amadeus’ growing portfolio which includes catering for seven million visitors a year as part of the NEC Group and over 30 venues across the UK including visitor attractions, exhibition and stadia venues.

Source: Caterlyst, 18th January

Travel and Leisure Sector

Retail sales at railway stations surge 9%

Despite poor high street retail performance over the Christmas period, shoppers seemingly used retail stores in railway stations for last-minute gifts. Network Rail figures show total station retail sales for the festive period (18 November to 23 December) grew by 9%, reaffirming shoppers increasing appetite for convenience retail. Station retailers saw a total of over £110m in sales during this busy period with gifting and food outlets performing particularly well.

Source: Kamcity; Namnews, 15th January


Starbucks ranked 5th most admired firm in world & first in F&B industry

Starbucks has been named the fifth most admired company in the world by Fortune magazine in its annual rankings. Starbucks was also ranked number one in the food and beverage industry. This is the 16th year in a row that Starbucks has been included, and is the only traditional brick-and-mortar retail business to be included in the top 10 list.

Source: Caterlyst, 19th January

Pub Sector

Pubs buck downward trend as restaurants feel the pinch

Britain’s pub and restaurant industry looks to have suffered a tough Christmas as festive revellers curbed their spending on food. Data from the Coffer Peach business tracker, which is seen as a bellwether for the industry, has shown comparable sales were down 0.1pc for the six-week Christmas period compared to the prior year. Food appeared to be the main casualty, with like-for-like sales at restaurants down 1pc compared to a small rise of 0.6pc at pubs.

Source: The Daily Telegraph, 19th January


Gin fuels surge in distilleries

The number of distilleries in Britain has more than double in the last five years, fuelled by a boom in English gin makers. Almost 50 new gin distilleries opened in Britain last year, underlining the nations renewed passion for the spirit. There are now 315 distilleries up from 152 in 2013, according to figures from HM Revenue & Customs. Five years ago the majority of distilleries were making whisky in Scotland but since then Britain has been in the grip of a so-called “ginaissance” and England has led the way.

Source: The Guardian, 18th January


M&B achieves robust Q1 results

Mitchells & Butlers (M&B) has posted its First Quarter Trading Update Trading statement covering the 14 weeks ended 6 January 2018. Trading through the core three week festive season was strong, with LFL sales growth of 3.9%. Christmas Day was a record taking day with like-for-like sales growth of 5.4% and 225,000 meals sold.

Source: Caterlyst, 15th January

Wholesale and Manufacturing Sector

Brakes parent Sysco acquires Kent Frozen Foods

US group Sysco looks set to further expand its presence in the UK after signing an agreement to acquire Kent Frozen Foods, a £47m-turnover foodservice distributor. If the deal is approved from the Competition and Markets Authority (CMA), Kent Frozen Foods will join Sysco’s other UK businesses, including Brakes, Fresh Direct and M&J Seafood.

Source: Kamcity; Namnews, 18th January


Christmas revenues give lift to Premier Foods

Record sales of mince pies and overseas demand for Cadbury cakes boosted Christmas revenues at Premier Foods, the highly indebted UK group. Gavin Darby, chief executive, said he was “rather pleased” with 4 per cent sales growth in the three months to December 31 — the group’s biggest quarter — making it the second consecutive quarter to beat expectations.

Source: Financial Times, 18th January


Bestway sets up van sales division using P&H vehicles

Bestway has set up a van sales operation from the remnants of the Snacksdirect and Sweetsdirect businesses that were operated by Palmer and Harvey (P&H) before its collapse at the end of last year. The wholesaler’s new business will service more than 20,000 retail customers with a fleet of 180 vans acquired from P&H’s administrators, PwC. The vans will call on retailers every two weeks.

Source: Kamcity; Namnews, 17th January


Finsbury Food performing in line with expectations

In an update on trading for the six months ended 30 December, bakery manufacturer Finsbury Food said it has performed in line with management expectations as it reported robust growth in its core UK business. Total group sales revenues, including the discontinued Grain D’Or business, edged up 0.7% to £157.8m.

Source: Kamcity; Namnews, 19th January


ABF sugar sales leave a bad taste as Primark toasts a record Christmas  

A sharper than expected drop in sugar prices dragged on sales at Associated British Foods’ sugar division lower, taking the shine off the record UK festive sales at the group's budget fashion chain Primark. Shares in ABF slipped by 86p, or 3pc, to £27.77 in midday trading as analysts called the blue-chip conglomerates festive update a “mixed bag”. Although the overall outlook for the group remains unchanged, profits at ABF’s British Sugar division are now expected to fall this year due significantly lower EU sugar prices.

Source: The Daily Telegraph, 19th January


Ready meals maker Bakkavor serves up lukewarm sales growth

The ready meals maker Bakkavor disappointed the City yesterday with its first formal trading update. The company, founded by Iceland’s Gudmundsson brothers, reported that sales were up 4.6 per cent in the year to the end of December. The performance underwhelmed investors and its shares fell by 2¾p yesterday to 197p.

Source: The Times, 19th December

Trend of the Week

Designer dishes

Fashionable food has seen an interesting development lately, as designer labels begin to open their own foodie destinations, both in store and off-site. Taking the meaning of branded restaurants to a slightly different level, labels across the globe such as Gucci, Burberry, Ralph Lauren and Vivienne Westwood have all opened their own eateries from café’s and bakery’s to fine dining establishments. These couture turned cuisine attractions all have the common theme of being highly image oriented, and while fashion branding and food branding may seem worlds apart, the approachability of a restaurant in a fashion store brings in a new, albeit unexpected revenue stream, while appealing to those looking for convenient yet glamourous resting stop during their shopping experience.