Exploring the Revenue Trends of Leading UK Restaurant Operators

Here are the UK’s top 10 restaurant operators by revenue, compiled by GlobalData analysts. The list includes top brands by 2017 revenue from the QSR, FSR and coffee and tea shop channels, giving a broader view of leading operators in these three key channels.

McDonald’s Corporation
Outlets: 1,285 (2017)
Revenue: (GBP£): 2.068 billion

The fast food behemoth has undergone somewhat of a renaissance period since appointing British Steve Easterbrook as its CEO in 2015. Since his appointment, the Golden Arches’ share prices have increased by over 60%, driven by technological initiatives, including the convenient ‘experience the future’ self-order kiosks and a partnership with food delivery company UberEats covering key cities across the UK.
McDonald’s primarily value-driven proposition is connecting well in a UK marketplace that is battling political and economic uncertainties, including uncomfortably high inflation rates. Themed limited edition campaigns, such as the annual ‘Great Tastes of America’ and ‘McDonald’s Monopoly’ have helped encourage repeat visits among consumers looking for novel and exciting new dining experiences.

Starbucks Corporation
Outlets: 951 (2017)
Revenue: (GBP£): 1.079 billion

However stagnant wage growth across the country may dampen consumers’ willingness to spend on luxury coffee drinks, especially when faced with significantly cheaper alternatives from Greggs or McDonald’s. Attempts to stretch operating hours by offering ‘fuller’ meal options and alcohol have largely stalled, with Stansted Airport remaining the UK’s only ‘Starbucks Evening’ concept store. With over 12,000 dedicated coffee and tea shops across the UK, market saturation is becoming a major concern among top coffee shop chain operators.

Costa Coffee
Outlets: 2,389 points of sale (2017)
Revenue: (GBP£): 1.003 billion

Recently spun off from parent Whitbread, Costa Coffee is the UK’s largest domestic coffee shop brand and has a sizeable presence across a number of European and Middle Eastern markets. The expansion of Costa has been characterised by the flexibility of its formats. Aside from its brick and mortar stores, Costa distributes a selection of hot drinks through its chain of self-service coffee machines, Costa Express. Costa operates over 6,000 of these machines across motorway forecourts, hotels, corporate offices and supermarkets. Costa Coffee has recently pledged to recycle up to 500 million coffee cups a year by 2020, placing the brand at the forefront of the market in terms of sustainability.

Domino’s Pizza
Outlets: 1,045 (2017)
Revenue: (GBP£): 980 million

Domino’s Pizza is the clear leader of the UK’s pizza market space, with the brand boasting of a 46% share of the market in its most recent annual report.
A desire for ‘ultra-convenience’ among time-scarce UK consumers has boosted demand for on-the-go pizza. Similarly, the brand has also benefited from cash strapped consumers opting to ‘trade down’ from traditional restaurant family meals outside of the home.  Growth in the market over recent years has been driven by Domino’s increased investment in e-commerce. The chain’s ‘Anywhere’ platform has created the ability to order pizza through smart watches, TVs or game consoles, adding an extra layer of convenience to the brand’s value proposition. The growth of online food delivery platforms such as Deliveroo or UberEats may worry Domino’s Pizza as adventurous consumers look for, and now have easier access to, alternative meal solutions to pizza.

Pret A Manger
Outlets: 360 (2017)
Revenue: (GBP£): 796 million

Pret A Manger (French for ‘ready to eat’) is an international sandwich shop offering sandwiches and health-focused snacks primarily aimed at lunching office workers.
During 2016, Pret opened its first vegetarian-only pop up shop in London’s Soho. The concept exceeded expectations, causing the brand to create ‘Veggie Pret’, which now has three permanent locations across London. The brand’s unique selling point is that its sandwiches are made daily, and do not feature sell-by dates. Sandwiches that haven’t been sold by the end of the day are donated to food banks, boosting Pret’s already strong CSR credentials.

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Outlets: 847 (2017)
Revenue: (GBP£): 791 million

KFC represents Yum! Brands’ largest foodservice brand in the UK market, ahead of both Pizza Hut and Taco Bell. Although many QSR operators have pivoted towards healthier food offerings in recent years, KFC’s product range has remained largely indulgence-led. Although limited edition products, including the Double Down, have caused peaks in demand for the Colonel, he remains some distance behind market leader McDonald’s in terms of product innovation. A heavy focus on marketing in recent years has created substantial media buzz around the brand. Notable campaigns have included sending a Zinger Burger into space and creating its own virtual reality game.

Outlets – 392 (2017)
Revenue – GBP 772 million

Focused around their core ingredient, peri-peri, Nando’s has grown to become one of the best-known global ‘fast-casual’ dining brands. Nando’s became somewhat of a cult success in the UK, driven partly by the brand’s popularity among on-trend celebrities such as Ed Sheeran and Lewis Hamilton. The brand has recently introduced a new format called ‘Nino’, a streamlined take on its core restaurant business. ‘Nino’ outlets featured a cut-down menu and smaller seating area with greater emphasis placed on grab-and-go meal solutions.

Outlets – 2,378 (2017)
Revenue – GBP 629 million

Globally, Subway operates over 43,000 stores, making it the world’s largest QSR operator by a substantial margin. Subway sandwiches are prepared fresh in front of consumers, tailored to their individual requirements. This customization has long appealed to UK consumers’ demand for greater input into their food, but has arguably become a little stale at Subway, as the offering has not significantly changed or evolved since the brand’s inception. Led by CEO Suzanne Greco, the Subway brand has recently undergone a much needed refresh, with the logo being modernized and outlets being refurbished to incorporate self-order kiosks.

Burger King
Outlets: 500 (2017)
Revenue: (GBP£): 594 million

Burger King has faced fierce competition in the UK market due to the rise of upmarket ‘posh’ burger operators such as Gourmet Burger Kitchen and Byron. Whilst market leader McDonald’s introduced a ‘Signature’ line of burgers to compete against these brands, Burger King has remained almost exclusively value and indulgence-led. While brand partnership products such as Mac n’ Cheetos have been key to innovation across Burger King in its domestic market of the US, these products are rarely introduced into the UK. ‘Hyper-personalization’ has been touted as a future area of innovation for the Burger King brand in the UK.

Pizza Hut
Outlets: 679 (2017)
Revenue: (GBP£): 536 million

Pizza Hut is the second-largest pizza focused foodservice operator in the UK market, marginally ahead of competitors PizzaExpress and Papa John’s. Couponing and discounts, including the ‘Two for Tuesday’ promotion, have been strong tools for building customer loyalty to the Pizza Hut brand. Similarly, the chain’s fully fledged dine-in restaurants give it a competitive advantage over market leader Domino’s. Owing to the homogenous nature of pizza, product innovation and diversification have been vital for operators to ‘differentiate’ in the market. As a result, Pizza Hut has built up a significant pasta menu to complement its pizza options, including mac ‘n’ cheese and lasagne.