Restaurant Prices continue to decrease

A study by Horizon’s Menurama has shown a number of changes to the market. This biannual survey has shown firstly that restaurants and pubs have responded to the recession and attempted to keep customers dining out with an all-time high in discounts being used. In winter 2013, a new peak was reached with 76% of restaurants and pubs using discounts, compared to 70% winter 2012 and 59% in summer 2013. For many, value menus have become a staple of gaining custom, particularly in winter where people are already less likely to eat out.

Another new trend seems to be in that the price gap between restaurants and pubs is decreasing. Restaurant prices are down for a second year in a row. In 2013 the average price of a 3 course meal fell by 4.6% which can be separated into a 9.2% decrease in starter prices, a 3% decrease for main courses and a 2.8% drop for desserts. This makes for evidence that restaurants are increasingly struggling, with issues particularly around the New Year period meaning that restaurants are having to resort to both lowered prices and the aforementioned increase in promotions to continue their supply of customers.

Conversely, the price of food in pubs is up for the fourth year in a row, which shows that this part of the industry is clearly confident about pulling in customers. A 7.4% increase in the price of a 3 course meal in a pub is a clear example of this, average price of a starter is up by 2.7%, dessert prices up by 6.1% and most critically there has been an over 10% increase in the average price of a pub main course over this period.


This clearly shows that there is a change in the market. The rise of the casual dining industry will have had some impact on this too. Pubs are generally opting towards a casual dining approach, which is providing them enough custom to not have to worry about prices, although they still use promotions. Restaurants appear to be being threatened by this trend. Fast casual dining in particular has been undergoing growth in the last few years and perception of this as a better value and easier alternative to a formal restaurant has meant restaurants are increasingly threatened by these new companies. This can go some way to explaining how, despite the steady recovery in UK citizens eating out, restaurants are having to severely cut their prices, if they didn’t it would lead to even further problems with gaining customers.


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