Our restaurants team works across the breadth of businesses within the industry; from independent through to branded chains and high-end dining, we're able to provide you with an in-depth view of the entire market.

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As the economy improves and more discretionary spend is available, the overall value of the restaurant industry continues to grow - underpinned by an increased frequency of eating out. It's estimated that on average in the UK, 40% of an individual's leisure spend is on eating out and 31% of people do so at least once a week. Due to the variety of dining options available, restaurant operators need to compete for every penny. 

Consumers demand quality, but they also crave diversity and value, which means there are opportunities for every type of business to increase their market share. Individual asset sales continue at a steady pace; some 82% of Christie & Co’s restaurant sales are on behalf of private vendors and activity has remained steady in 2015. Of the 23,500 restaurants in the UK, 73% are independently operated - most of these independents have survived by adapting their offer to suit the local market and offering a more personal service, and many not be burdened by the high overheads of being located in prime locations, competing with branded restaurants. 

The success of regional expansion driven by brands such as Byron and Côte, helped the industry to attract private equity investment in 2013 and an even larger number of private equity players during 2014. The most notable transactions last year saw the break up of two of the largest restaurant groups, Gondola & Tragus. This saw 790 sites change hands for £1.19 billion and involved well known names such as Pizza Express, acquired by new entrants Hony Capital from China, Strada, Zizzi and ASK. This trend continued in 2015 when the successful Las Iguanas chain of 41 sites was bought by the Apollo backed Casual Dining Group for £85m, with further buyers circling brands such as La Tasca and Yo Sushi. 

We predict that British brands will continue to target international expansion and we will also see some overseas brands entering the UK market. The complexity and costs added by new EU allergen regulations, requiring restaurateurs to disclose ingredients and provide allergen information to customers, may cause a few headaches. We can expect to see continued private equity interest in the restaurant sector, as well as increasing pressure on margins as a result of red tape, rising “high street” rents and increases in the minimum wage. There will also be potential for consolidation, as a number of brands falter due to these factors.

The ALMR Christie & CO Benchmarking Report

The ALMR Christie & Co Benchmarking Report, the most comprehensive study of its kind in licensed hospitalit, has been launched and benchmarks operating costs, market trends and sector performance.

This is the tenth edition of the report and shows the average costs associated with running a pub at a seven-year high - with payroll costs accounting for almost 30% of turnover. It also underlines the continued evolution of the licensed hospitality sector with food sales now accounting for 32% of revenue. 

To view highlights from the report, please use the button below to download the pdf. If you would like to purchase the full report, please contact the ALMR - you can link through to their website using this logo.



increase in restaurant mandates in 2015

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As consumer confidence and disposable income have grown, thanks to low inflation and a rise in wages, the boom in casual dining has continued into 2015 with an increase of 6.9% on last year, according to research by AlixPartners and CGA Peach. For the first time this year this means that there are more restaurants than wet-led community pubs across the UK. London remains the largest market for eating and drinking out only rivalled by the accelerated growth in other big cities such as Manchester, Glasgow and Bristol to name a few.

The good news in the London region is that both local and corporate operators are trading well and looking to expand. It is still a case of location, location, location for operators, with primary high street sites and revitalised retail parks/shopping centres where they can guarantee good levels of footfall making top of the list. Small brands are looking to further expand and there has also been a surge of activity in the unlicensed area, with more coffee based venues providing good food offerings. Existing buyers are more active than first time buyers who remain cautious with regard to upfront rents and premiums.  

The market in the North is also buoyant with particular demand for restaurants or catering establishments in town and city centres or affluent residential areas. Small and medium sized regional chains are spreading throughout the major northern cities and national chains continue to seek new sites outside of London. There are increasing numbers of new applicants looking to buy restaurants and catering businesses as the food sector becomes more fashionable. Restaurants are being viewed as a safer bet by the banks than in previous years, meaning buyers no longer have to pay cash, though experience still plays a significant factor.

City centre restaurants in Scotland continue to thrive as the economy improves with average sale prices increasing by over 15% in the last 4 years. National chains and local operators are now battling for prime sites within city centres, with many making offers on and above the asking price for the right business. Rural sites are experiencing more turbulent times due to the change in the drink driving limits launched in December 2014, so that more consumers are opting to stay home rather than travel out to these locations.

Town centre locations are attracting some interest but buyers are looking to gain maximum value by reducing premium rent on these properties. It is a tougher market at this time in the South with very selective buyers prepared to wait.

This is in contrast to the South West which continues to develop its reputation as a foodie haven thanks to an abundance of good quality food producers and a very buoyant market fuelled by the surge in casual dining. Over 90% of restaurant sales in the South West were to small local chains or independent operators in 2014 and this trend has continued into 2015. Operators have experienced an improvement in turnover by up to 20% over the last 12 months. Bristol, Bath, Cheltenham and the Cotswolds remain prime locations for the region, however, we are also seeing a rise in operators relocating to Devon and Cornwall for the attractive rents and restricted competition. The key change in the local buyer profile has been the surge in first time buyers, particularly those with a new casual dining concept. 

No two buyers are the same and at Christie & co we understand the needs of the first time restaurant buyer, through to the small and corporate operators. From gastro pubs, Italian trattorias, country hotel restaurants and city centre cafes to fine dining establishments, we can help you buy the perfect restaurant business for you or help you sell when the time is right.

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