Casual Dining in 2025: Recovery, Growth, and New Opportunities
Posted by Emma on 17th Jan 2025
The casual dining sector in the UK is entering a recovery phase in 2025, marked by renewed growth opportunities and strategic expansion, according to Christie & Co’s latest Business Outlook report. Following a challenging period, restaurant brands show resilience, with many reporting improved margins and actively seeking new locations.
The report highlights a reduction in the number of full-service restaurants in 2024. However, it predicts a positive trajectory for 2025, spurred by robust profit margins and a shift in consumer preferences towards dining out. Casual dining brands are expected to expand cautiously, taking advantage of attractive property deals nationwide.
In contrast, the quick-service restaurant (QSR) sector experienced significant growth last year, with a 10% increase in outlets. This trend will continue, driven by the sector’s ability to adapt quickly to changing market dynamics and consumer demand.
Menu inflation peaked at 27% and eased to 5% by the end of 2024, offering some relief to operators. This reduction reflects broader cost stabilisation across the industry. However, regional disparities in rental costs remain a factor. For example, the average rent per square foot for restaurants in London stood at £87 in 2024, significantly higher than Manchester’s £28 and the £50 associated with drive-through sites.
The high-end dining segment is undergoing notable changes. Several prominent fine-dining establishments closed their doors in 2024, a trend attributed to the pressures of operating in a volatile market. Christie & Co forecasts that the remaining venues will position themselves as exclusive, high-cost destinations for special occasions, potentially benefiting restaurateurs and discerning customers seeking unique experiences.
Simon Chaplin, Senior Director of Pubs, Restaurants, and Franchise at Christie & Co, commented on the evolving dynamics:
“2024 proved to be a tipping point for many in the restaurant sector, as the well-publicised pressures mounted and support in most forms ended.
“Those still here in 2025 are now in a prime position to take advantage of the continued appetite to spend on hospitality, which increased last year, as opposed to cooking at home as supermarket spending decreased.
“To date, this has been focused on the fast-growing QSR market but will filter into casual dining brands as the year progresses, who will expand carefully with great property deals available.”
As the hospitality industry continues its recovery, 2025 promises a mix of challenges and opportunities. With easing costs and a strong consumer appetite for dining out, casual dining brands and quick-service operators are well-positioned to thrive. The shifting landscape of fine dining may also redefine exclusivity in the sector, creating new possibilities for restaurateurs.