Brexit puts brakes on small chain expansion

The UK’s decision to leave the European Union is being blamed for a slowdown in entrepreneurial activity in the foodservice sector.

Results from Horizons’ biannual Ones to Watch research found a decline in the number of new eating out brands and a slower rate of expansion for more developed chains.

“Overall there is still growth in the number of new concepts included in Ones To Watch but at just seven new brands, a total of 190, this is fewer than we have seen in its five year history,” said Horizons’ analyst Nicola Knight. “In April 2016 the research revealed 12 new concepts, a total of 183, while this time last year 30 additional brands met the criteria.”

The survey, which tracks brands from the opening of their fifth unit through to their 25th site also found a significant fall in the number of brands to have grown too big to be included in the survey.

“This slowing of entrepreneurial activity may be the beginning of a more general slowdown in the foodservice sector, even a short recession across the economy with Brexit being the key reason behind the uncertainty,” said Knight. “It shows that fledgling operators are currently being more cautious in their expansion plans.”

Dessert cafés were among the fastest growing brands with franchise concept Kaspa’s growing from just two sites in 2013 to 25 in 2016. Another dessert café, Treatz Dessert Parlour, also made the list having expanded from one outlet in 2013 to seven in 2016.

Coffee shop brands including Bobs and Berts, Grind and Co and Red Kiosk also featured prominently in the list, which has previously tracked the growth of brands such as Leon, Bill’s and Jamie’s.

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