Restaurants
In this section, we explore the restaurant market in 2024 and provide predictions for the sector in 2025.
Market Overview
It has been a while, but it looks like we are starting to see a recovery in the casual dining sector. It may have been a long and painful decline for many, but at last brands are looking for new sites and reporting an uptick in margins.
Like pubs, the number of full-service restaurants has fallen from 32,000 to 26,000, but, as profitability has started to stabilise it is predicted that we will see outlet growth in 2025.
In addition, a particular success story is the Quick Service Restaurant (QSR) sector. With over 100,000 take-aways and cafes in the UK, it may seem surprising that less than 20% are operated by the ‘big brands’. The rapid expansion of the likes of German Doner Kebab and Slim Chickens, alongside the continued growth of McDonalds and Starbucks, is compelling.
We are seeing more proven international brands entering the UK with the likes of Carls Jr. teaming up with Boparan, to open in the UK early this year. Wendy’s has re-entered the UK, and Chick-fil-A, the legendary US brand which opened in Reading in 2019 but subsequently quickly closed, is trying again this year, such is the prize.
Those who used to go to the high street for family dining are dropping down in price to QSR. This has made operators improve their quality as they chase the customer, and the younger generation loves the speed and reliability. Such is the growth and demand for drive-thru sites, we are finding their rents are now higher than in key city centres.
This growth has been supported by the acceptance of the franchise model. At a time when businesses are being hit by financial pressures, it can be gratifying to know that you have a multi-national on your side offering support and advice.
Stephen Owens
Managing Director – Pubs & Restaurants
Key Market Trends
As of 31 March 2024 compared with figures taken on 31 March 2023:
Price Index
Movement in the average price of sold assets, year-on-year.
A drop in the price index was expected and reflects continuing difficulties in the restaurant sector. At the start of 2024, food inflation was still at 7%, operating costs remained high, and consumers were dining out less as prices increased to compensate. With a reduction in profit margins and continuing closures of both high street branded sites and headline-grabbing fine-dining venues, investors were unwilling to take the risk. However, we have seen many landlord-incentivised deals, and food entrepreneurs coming back into the market at the end of the year. It remains to be seen whether this will stall once employers' National Insurance Contribution (NICs) increases hit, or if we will see a return to an upward trend in the price index.
Market Sentiment
We anonymously surveyed restaurant stakeholders across the country to gather their views on the year ahead.
Market Predictions 2025
- We will continue to see a gradual recovery in the casual dining sector
- There will be continued growth of Quick Service Restaurants (QSR)
- Fine dining will become more exclusive and expensive to customers
- We will see market integration for greater synergy benefits
- There will be an overheating of rents for QSR drive-thru sites outside of towns
Case Studies
Chez Lindsay, South West London
Sold on behalf of its long-standing owner of 35 years, this well-respected French restaurant was sold on its existing lease, off an asking price of £120,000.
The Stable, Plymouth
A freehold investment in a Plymouth waterside development, with established restaurant in occupation. We secured a sale at a yield of 8.3%.
Mark Toney Ice Cream Parlour, Newcastle upon Tyne
The sale of a well-established business, trading since 1892, with two cafes in Newcastle and a wholesale business supplying over 200 venues in the Northeast.
Major Transaction from 2024
| Date | Business | Purchaser | Details |
| May | Carls Jr. | Boparan | UK master franchise secured for this international burger brand, with the first site to open in Q1 2025 |
| Jul | 40 KFC sites across the UK | Adil Group | Takes Adil’s portfolio to over 100 KFC outlets |
| Jul | 46 Taco Bell sites across the UK | Karali Group | Karali Group become UK’s largest Taco Bell franchisee and follows the purchase of Crosstown Doughnuts earlier in the year |
| Oct | 113 Starbucks sites acquired | Starbucks UK | A deal which brings company-owned stores to over 500 in the UK |
| Oct | 51 TGI Friday’s restaurants | Breal & Calveton | Breal & Calveton acquired 51 of TGI Friday’s 81 restaurants, with the remaining sites returned to landlords. |
| Oct | 21 sites from 200 Degrees | Nero Group | Growing group with Caffe Nero, Coffee#1 and recent acquisition FCB |