A visit to pretty much any town centre is enough to tell you that eating establishments are taking over. But let’s put some numbers on it. In the year ending June 2014, the UK’s eating-out market (that’s everything including quick-service restaurants, retail, casual dining, pubs, full-service restaurants, travel and leisure, and workplace and education catering), was worth £50.4 billion ($76.2 billion) according to the NPD Group, up nearly two per cent from £49.4 billion ($74.6 billion) the year before. The most significant increases were in the casual dining sector, where sales were up 5.5 per cent from 2013; coffee shops, which experienced growth of 3.7 per cent; and pubs, up by 2.9 per cent.
Indeed, the restaurant and casual dining sector has weathered the recession better than many consumer-facing industries and it is now well positioned to benefit from the improving economy, consumer confidence and spending power.
‘We believe that the prospects for the restaurant and casual dining sector are bright,’ says Cameron Cartmell, sector leader for hospitality and leisure at Ernst & Young. This is borne out, he says, by the rapid influx of new restaurant brands and concepts into the UK in the past year and ‘a marked increase in transactional activity in the sector’.
‘Managed pub operators have recognised the need to diversify, and food-led estates have dramatically strengthened their offerings. Also, many prevailing market shifts are in the sector’s favour – for example, the rise of online retail and the resulting shift in shopping habits have driven an increase in high street retail vacancies. Much of this space should be attractive to restaurateurs and publicans alike.’
With an increase in branded environments, both for the casual dining sector and also the related hotel market, the onus on distinctive and differentiated interiors is on the increase, as are the requirements to run expanding estates cost effectively. Not surprising, then, that use of LEDs in particular has become more widespread for the lit environment.
‘The development of LEDs continues apace,’ says Neil Knowles, founder and director of Elektra Lighting. ‘The main improvement recently is the return of narrow spots to the lighting designer’s toolkit – previous LEDs were very poor at narrow beam spots, and this made accenting and drama difficult. Most of the chain hotels require it. Brands such as Hilton and Hyatt have largely adopted the US Ashrae 90.1 standard, which requires such low energy use per square metre that there is no way to comply apart from using LEDs.’
Robert Chelsom, managing director of Chelsom, adds: ‘LEDs are really at the forefront of the latest developments in the hospitality industry. Realistically, clients are about halfway down the road of using LEDs. Because LED is the buzzword in the industry at the moment, everyone thinks they can do it all, but they aren’t necessarily the answer to every lighting requirement and the cost is still on the high side.’
Although LEDs are a tempting alternative to notoriously inefficient traditional sources such as squirrel cage lamps, Chelsom keen to focus on the application of LEDs for decorative rather than simply energy-saving purposes. ‘More sophisticated dimming and mood-setting systems are being used to enhance the ambience,’ he says.
Not all sectors are at the same stage. The pub trade, for example, is split between brewers who still maintain an estate, such as Greene King, Marston’s and St Austell, and pure pub companies such as Spirit and Punch Taverns, which are essentially property and restaurant businesses.
Weblight provides managed lighting services to clients like these, and is currently working on a big LED rollout for Spirit. Founder Mike Thompson says that the retrofit market is moving more slowly. ‘I have been a little surprised by the reticence on retrofit, but it appears that pretty well all new build is now LED, at least in the public areas,’ he says. ‘There is still plenty of scope for further penetration for retrofit and I think there are several reasons for this relatively slow adoption of the technology, despite the massive cost savings that it offers through energy and maintenance savings.’
He points to the difference between managed estates and tenanted estates. For managed estates, it’s far easier for companies to introduce blanket policies. ‘The majority of the lighting in pubs is often via domestic type halogen and tungsten fittings that are generally at a low level and easy to access,’ he says. ‘It is quite straightforward for a pub manager to replace any failed lamps and each individual lamp is generally not particularly expensive, so that work can pass “under the radar” of the property management department.
‘The ambience of pubs is extremely important in attracting trade, and pub owners want to ensure that any new light sources will replicate the warm, cosy sensation generated by full-spectrum halogen and tungsten lighting. It is only really in the past two years that light sources of sufficient quality have been available across the lamp types – and with the ability to dim, which is very important in pubs – at a price that makes the refit practical. We have had to fit out pubs for different brand images to prove to the brand managers in the companies that the lit effect is as good as that of the traditional light sources. Once that is proved, the economic argument is compelling.’
The tipping point?
Thompson believes the tipping point has now been reached, but Chelsom reflects that other sources will continue to maintain their presence. ‘Drama and sparkle will still be created by halogen light sources and high-quality compact fluorescents will still provide long life with economic prices for ambient lighting such as table, wall and floor lighting,’ he says. ‘The pressure from clients to create unique and memorable interior schemes has never been stronger and lighting plays a huge part in that which in turn means higher levels of design are required across the board, blending cutting-edge styling with the latest LED technological developments.’
Ultimately the traditional challenges remain, says Knowles. ‘It’s the same as always – create a fabulous looking project for a tight budget. It’s just that lighting designers are doing it against a background of constantly changing products, of not being able to use the same downlight we did three years ago. Or even last year.’
The UK’s major managed pub players
Spirit Pub Company
770 managed pubs, including the Chef & Brewer, Taylor Walker and Fayre & Square brands. Merging with Greene King
Food sales £278m ($420m)(year to 17 August 2013)
1,000 managed pubs including the Hungry Horse, Old English Inns and Meet & Eat brands
Food sales 41% of total, up from 36% five years ago
Marston’s 500 managed pubs, including the Two for One, Milestone and Carvery brands
Food sales 57%, up from 37% five years ago, with plans to open 25 pub-restaurants while closing pubs that emphasise drink rather than food
On total sales of £1.3bn ($1.9bn) in the year to July 28 2013, like-for-like bar sales grew by 3.8%, compared with food like-for-likes up 10.9%. Intends to open 30-40 pubs this year.
Mitchells & Butlers
1,700 managed pubs, including Harvester, Toby Carvery and Miller & Carter.
Food sales 51%, up from 41% five years ago
400 pub restaurants, including the Beefeater and Brewer’s Fayre brands.
In the nine months to 27 November 2014 restaurant sales were up 3.3% year-on-year. It also owns Premier Inn and Costa.