Emerging restaurant sector shows first signs of recovery

After three years of decline, the fastest expanding emerging restaurant brands have recorded 3.8% of growth in the past six months.

Consultant Peter Backman’s twice-yearly report on the Ones to Watch saw an increase in the number of brands featured from 129 to 134, possibly indicating a return to good fortune for the sector.

Topping the list of Ones to Watch – those with between five and 25 outlets and growth in excess of 20% in the past three years – was Crosstown Doughnuts, which has grown from two stores in 2016 to 20 stores in 2019, a growth rate of 900%.

Adam Willis the co-founder of Crosstown Doughnuts said: “We are always happy to see great results feeding through about Crosstown. We see amazing opportunities for us to be able to continue to develop our operation here in the UK, as well as abroad. We have really focused over the last five and a half years on sustainable growth at a sensible pace.”

Backman said the number of stores operated by Ones To Watch increased for the first time in three years, between May and November 2019, although there has been a net fall of 333 Ones To Watch units from a high of 1,659 in May 2016.

Coffee vendor Tim Horton’s has experienced the most store openings of the cohort. The first outlet opened in in 2017 and it has grown to 25 outlets.

Other notable brands to experience strong growth include Kokoro Japanese casual dining which has grown from six outlets in 2016 to 25 and the Little Dessert Shop dessert café which has grown from four stores in 2016 to 21. These reflect the growing popularity of small-footprint, fast food models.

The number of brands featured in the report has marginally increased in the six-month period from 129 to 134, however, in May 2016 there were 183 brands, a net fall of 49 brands. The fastest growing brands have grown by 3.8% in the last six months. According to Backman this could suggest the early stages of recovery for the restaurant sector.