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The Market

Demand

We operate in a challenging and uncertain environment, both in the economic environment as a whole and in our sector specifically. Consumer confidence remained fragile throughout 2016 and 2017, whilst spending remains in growth, albeit at a slowing rate. There is clearly therefore some caution over future demand, however this backdrop is not new and encouragingly we have still continued to improve our sales performance.

In the UK we have seen headline inflation figures start to rise recently, and more specifically food service inflation has increased in the early months of 2017. This inflationary environment also clearly impacts on our own, and our competitors' decisions to be made on pricing. We have stated previously that we would expect some price to be taken in the sector, and we have seen recent indications of this. Despite this, there has also been evidence of aggressive discounting during quieter trading periods.

Supply

The level of supply in our market has also changed significantly in recent years. The high number of new casual dining restaurants opening in the sector was particularly high up until the middle of 2015. Since then we have seen restaurant supply growth slow considerably, reducing to a small decline in the last three quarters of 2016, although clearly within the net position there are examples of segments and operators that are continuing to successfully roll out. Overall we are not seeing the same level of new openings as we were two years ago, but it remains a highly competitive marketplace in which to operate.

As at May 2017.

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Contact Us

A photograph of Tim Jones
Tim Jones Finance DirectorCarlie WakefieldPA to Finance Director +44 (0) 121 498 6112
A photograph of Denise Burton
Denise Burton Deputy Company Secretary +44 (0) 121 498 6514
Amy De Marsac Head of Investor Relations +44 (0) 121 498 6514