Eating out is falling after hitting new high

10th June 2009, 8:53am

The amount spent on a meal in a restaurant has risen by 20% over the past five years, however there is a downside, said Peter Backman from market analyst Horizons.

Average spend has jumped from £10.09 in 2004 to £11.98 in 2008.

Meals in pub restaurants were 30% more expensive in 2008 than they were in 2004 as ingredient costs rose and customers increasingly chose costlier items from the menus. The average price paid for a pub restaurant meal rose from £10.61 to £13.76 in this period.

Meanwhile spend in European-style restaurants, those with Italian, Spanish, British and French menus, rose 19%, with the average price paid rising from £17.20 in 2004 to £20.51 in 2008. Spend in Chinese and Indian restaurants rose 16%, with consumers paying an average of £12.66 for an ethnic meal.

Peter Backman, managing director of Horizons, commented on the results: "Spend has risen this much over the four-year period largely because customers have been willing to spend more and because restaurant operators have put up prices as a result of the hikes they have seen in food and overheads such as rent, staffing and fuel.

"But in this recession higher prices cannot be sustained so in order to maintain sales restaurants need to reconsider their pricing strategies."

However, there is a down side. The rise in food prices is now slowing, with the level of food inflation at 9.7% in April 2009 from its peak last September at 13%.

Backman added: "We are beginning to see menu prices falling particularly with the number of special deals and offers currently in the market. The cost of eating out is likely to continue falling, at least until the end of 2009. Indeed, restaurant bills could fall back to 2006 levels.

"Spend in restaurants and pub restaurants reached a high in 2008 when demand was at its peak and operators could afford to raise prices. The situation has now changed considerably with competition for customers extremely tough."

Related Articles:

• 28 Apr 2011 - Cost of eating out reaches all time high, finds Horizons research
• 07 Dec 2010 - Foodservice discounting could weaken restaurant brands, warns Horizons
• 07 Sep 2010 - Are restaurants wasting their time with discount vouchers?
• 30 Apr 2010 - Restaurants introduce tempting deals to boost sales
• 10 Mar 2010 - Food manufacturers should be using catering sector to launch more products, says Backman
• 16 Sep 2009 - Diners are still eating out but have reduced average spend
• 29 Jul 2009 - US tourists waste money when eating out in the UK
• 23 Jul 2009 - Canny diners find ways to eat out for less
• 15 Jul 2009 - Eating out in the UK
• 23 Jun 2009 - Flexible working and pay freezes now common business practice
• 28 Apr 2009 - Supermarket meal deals threaten eating out
• 16 Apr 2009 - Brits opt for chicken breast over sirloin steak
• 13 Jan 2009 - Consumers eat out less but spend more
• 03 Dec 2008 - Restaurateurs need to discount
• 12 Nov 2008 - Pub sales set to drop by £1 billion
• 10 Oct 2008 - Sales of on the go breakfasts up
• 19 Sep 2008 - Food costs experience slow down

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