Hospitality industry’s outlook is still positive – Savills
Despite ongoing challenges to consumer finances, the outlook for the hospitality industry remains optimistic, according to the European Retail Market – 2024 report by Savills.
The report noted that a decline in food service price inflation has emerged, and energy costs have significantly decreased.
Observing how many food and beverage (F&B) businesses have focused on streamlining operations, enhancing efficiency in supply chains and front-of-house processes, and restructuring finances, the analysts noted how these efforts have positioned them on a stronger foundation for future growth and resilience.
Savills’ author Georgia Ferris, European research analyst commercial research, remains positive about the prospects for 2025 and expects to see further expansion of both quick service restaurants (QSRs) and premium dining establishments.
The QSR market is an important segment of the European F&B industry, showing consistent growth as consumers lean towards convenient, value-focused food options and quick service dining.
Convenience for the time-poor consumer continues to be a key driver behind customer satisfaction and it will become increasingly important for F&B operators to know what kind of experience the customer wants. Additionally, technological advancements mean ordering and paying on smart phones often negates the need to interact with staff, speeding up the experience for the consumer and allows for a higher number of dining covers for restaurants. While rising food prices have likely put pressure on the accessibility of premium dining for all income groups, low-cost fast food outlets will continue to see a strong customer base.
Ferris said the expansion of franchising, especially with new entrants from the US, has spurred increased site acquisitions and is laying the groundwork for steady rental growth. The growing presence of QSRs across Europe, particularly in Eastern Europe, is contributing to the overall growth of the F&B sector. Wendy’s, Popeyes and Dunkin’ are three examples of QSRs who have expanded across Europe in recent years, with further expansion plans in the pipeline.
“European consumers are increasingly prioritising high-quality F&B options,” Ferris wrote. “The growing demand for experiential dining and distinctive culinary experiences has fuelled the success of premium brands, as diners look to spend their disposable income on memorable meals. Higher living costs mean consumers place more value on dining experiences for their leisure time, making experiential dining concepts such as interactive chefs tables well placed to capture a significant part of the consumer market.”
To encourage repeat visits following the cost of living crisis, businesses are focusing on factors such as outstanding service and unique experiences to better engage their customers. These upscale F&B brands attract both locals and tourists seeking exceptional dining, and social media and the ease of travel make new dining styles and food groups more accessible.
