Restaurant revival tipped as price gap between restaurants and fast food reduces
Wednesday, September 5, 2012/
Following a period of eating in rather than going out, a restaurant revival is on the horizon, with consumers returning to premium and mid-range restaurants and giving up on takeaway and fast food.
A report published yesterday by business analysts IBISWorld predicts the market share of premium restaurants will increase from 40% this year to 42% in 2017-18.
Mid-tier restaurants’ market share is also expected to rise from 32% this year to 34% in five years.
The area that’s losing market share is the low-end, fast-food category, which IBISWorld says will decrease from 28% this year to 24% by 2017-18.
This year Australians are expected to spend a total of $14.85 billion in restaurants.
Premium dining venues will enjoy the largest spend at $5.94 billion while mid-range meals will receive $4.75 billion and $4.16 billion will to be spent on cheap eats.
IBISWorld senior analyst Craig Shulman told SmartCompany stronger incomes and more comfortable levels of consumer confidence were driving the move to premium and mid-range restaurants.
“While we saw that interest in restaurants over the past five years moved towards low-cost restaurants, we are now starting to see a bounce back to medium and premium restaurants,” Shulman says.
“We are just seeing a greater interest in food overall and the ability to spend on higher grade food, as well as a high level of health consciousness, is leading people to be aware of the food choices they make.”
Shulman says TV shows like MasterChef and My Kitchen Rules have captured these trends and driven them.
He says many premium restaurants are reducing their food prices in order to retain customer levels, while fast food chains are raising prices as a result of greater scrutiny of the food people are eating.
“There has been a compression of restaurant price ranges over the last five years,” says Shulman.
“Fast food has raised the level of variety on offer in that industry, so it is catering to the stronger interest in the type of food people want to eat today,” he says.
“Since it is not as homogenous as previously, that would raise costs and prices would be expected to rise as well.”