Restaurant, Café and
Coffee Shop
Last updated: October 2015
This pack has been designed to provide information on setting up a business in the restaurant, café
and coffee shop industry in Scotland, as well as helping to inform the market research section of
your business plan. You can find more information on how to write a business plan from the
Business Gateway website (www.bgateway.com/businessplan), including an interactive template
and tips to get you started.
This market insight was updated by Business Gateway in October 2015. If you find the information
contained in this document useful, tell us about it! Send us feedback here
(www.surveymonkey.com/s/33VQHR9); we will use your comments to help improve our service.
What do I need to know about the restaurant, café and coffee shop market?
The following summary statistics have been taken from market research reports and reliable
resources that the Information Service uses to compile industry information. They should give you
an indication of how your industry is faring at present and whether there is demand for your type of
business:

Sit-down restaurants look better placed than takeaways to benefit from rising consumer
expenditure in 2015. A quarter of diners would be willing to buy more expensive dishes at
restaurants, whilst a fifth would do the same at takeaways/ home deliveries. (Mintel, Eating
Out Review, June 2015)

Industry revenue is forecast to rise at a compound annual rate of 2.5% over the
next five years and reach £13.2 billion in 2019-20. (IBIS World, Full-Service
Restaurants in the UK March 2015)

The restaurants and cafes segment was the industry's most lucrative in 2014, with
total sales of $47.5bn, equivalent to 50% of the industry's overall value. The fast
food segment contributed sales of $24.0bn in 2014, equating to 25.3% of the
industry's aggregate value. (Marketline, Restaurants, April 2015)

Food and Drink Europe is a useful online source to keep up to date with food
trends across the continent, it provides news stories on business successes and
also upcoming trends. (http://www.foodanddrinkeurope.com/)

There are several national organisations for this industry including the British
Hospitality Association, The British Coffee Association, Scotland Food and Drink,
The Beverage Standards Association and the Food and Drink Federation.
Where can I find more information on my market?
The Information Service has access to a number of databases which can offer more detail on this
industry. Some of these reports are listed below - if you would like to be sent extracts from any of
these reports, please contact us on 0845 609 6611 or email info@bgateway.com.

Mintel – Eating Out Review (June 2015). Menu innovation offers a significant
opportunity for foodservice operators to re-ignite consumers’ willingness to spend
on this category. For example, a third of diners say that trying new dishes in
restaurants is a fun hobby.Operators will need to look to other methods of creating
standout if they are to repair brand loyalty, particularly in sectors such as
pizza/pasta restaurants.

Mintel- Menu Flavours (February 2015) Venues like hotdog specialists and
gourmet fried chicken brands continue the trend of taking junk food and elevating
it to a higher, more premium status. However, whilst gourmet junk food remains a
key trend in the wider eating out market, there has been little in the way of
expansion of these small fried chicken or hotdog specialists in 2014/15.

IBISWorld – Full Service Restaurants in the UK (March 2015). The FullService Restaurants industry is anticipated to perform better over the next five
years as the improving consumer climate encourages people to be less conscious
of value and eat out more often, lifting restaurant patronage and the average
spend per head
There are also a number of online resources you may find helpful:

Beverage Standards Association Coffee shops boost high street economy
by 2 to 4 percent (2014) Coffee shops play a significant role in driving high street
visits: 58% of consumers surveyed had planned to visit coffee shops as part of
their trip to the high street. Furthermore, 18% of consumers visited the high street
primarily to go to the coffee shop. Coffee shops are fundamental to the wellbeing
of British high streets: 95% of consumers interviewed feel that coffee shops
improve the vitality of the local area. Coffee shops produce neighbourhood hubs
and foster a strong sense of local community: 85% of consumers state that coffee
shops have a valuable role in the local community, an increase from 77% in 2010
(http://tinyurl.com/m8cx7g9)

Eat Out Magazine provides news and updates on the eating out industry.
(http://eatoutmagazine.co.uk/)

Allegra FoodService, Future Foodservice trends- reviewing trends in
innovation, concepts and cuisines (2014) This presentation includes consumer
and business research of attitudes to eating out and food trends.
(http://tinyurl.com/ogvweg5)
How can I find out about my competitors?
Business Gateway’s online guide to Competitor Analysis (www.bgateway.com/salesmarketing/sales/competitor-analysis) explains how to find your competitors, how to research what
they’re doing and how to act on what you learn about them.
Immediate competition will be from other businesses in your local area. There are several online
directories which can be used to find company information and generate lists easily and at no
expense. Many Local Authorities also publish local business directories on the web. Below are
some key web resources:

The Great Food Guide (tinyurl.com/7acom8r) Restaurant finder covering the UK

Restaurant Guide UK (tinyurl.com/cdjktkc) Details of 15,000 UK restaurants

Food In My Town (tinyurl.com/dy9flzg) Café and restaurant finder in the UK

General business directories such as Yell, Thomson Local or Google Maps
Likewise, your local Chamber of Commerce may publish a members’ directory; find your local
Chamber on the Scottish Chambers website (www.scottishchambers.org.uk/chambers/chamberlisting).
Once you’ve identified who your competitors are, the next step is to gather information on the way
they do business. Which services do they provide? How do they market themselves? How much do
they charge?
To learn about your competitors:

Look for articles or adverts in local newspapers, trade press and directories. If you need help
finding relevant publications, please contact us by emailing info@bgateway.com or by calling
0845 609 6611

Try to read their marketing material; if the company has an online presence, visit the company’s
website as a first port of call. Not only does it give you a better understanding of the company’s
activities, it can also offer a wealth of information such as a company history or staff
biographies, as well as the company’s partners or suppliers

Search for information on limited UK companies via the WebCheck service on the Companies
House website (www.companieshouse.gov.uk/toolsToHelp/WCInfo.shtml)

Gain an insight into your competitor’s performance using credit checks and the accounts that
limited companies are required to submit to Companies House each year. We can provide this
information free of charge; if you are interested in using this resource, please contact us by
emailing info@bgateway.com or by calling 0845 609 6611
What about suppliers?
Business Gateway has a guide to Choosing the Right Suppliers
(www.bgateway.com/supplierselection), which can help you decide what you need from a supplier,
how to identify one and how to choose one to deal with.
Trade associations or industry specific organisations may also be able to recommend suppliers or
contacts. You can also use the aforementioned resources for finding competitors to find suppliers.
Once you have decided on a supplier, we can run a credit check on the company to help assess
their financial stability. Please contact us by emailing info@bgateway.com or by calling the helpline
on 0845 609 6611.
Who are my customers?
Your business plan should include information about the customers you would expect. Business
Gateway’s guides on Finding and Keeping Customers (tinyurl.com/cow4zt6) and Retain and Grow
Your Customer Base (tinyurl.com/c2fw4o4) will help you to identify who your customers are, how to
use this information to sell more effectively and how to actively compete in your marketplace.
It can be useful to group your customers by geographical location, age or lifestyle. The websites
listed below are freely available and can provide most of this information:

Find demographics of potential customers in your local area using official statistics. Download
reports showing the population breakdown by age, gender and socio-economic group from the
Scottish Neighbourhood Statistics (SNS) site (www.sns.gov.uk). If you can’t find what you’re
looking for from SNS, please contact us and one of the team will be happy to help.

Access the latest population estimates from the General Register Office for Scotland (GROS)
(www.gro-scotland.gov.uk). GROS also offers demographic factsheets (tinyurl.com/cjutm7z) for
each Council area in Scotland, which can provide you with summary statistics for the area you
will be based in.

Use the Newspaper Society’s NS Database (www.nsdatabase.co.uk) to find a demographic
profile of an area. Search for a location by selecting “location” from the dropdown menu and
then click on “view JICREG data” to view social grade classifications of households in an area.
Definitions of social grade classifications can be found here: tinyurl.com/bvc9fcf

With regard to the latest census, information has begun to be released via the official website
(www.scotlandscensus.gov.uk). See in particular the Census Results Interactive Map
(tinyurl.com/owoys2t). Clicking on your area of interest will give the latest population figures,
including estimates by age.
How can you help me with other aspects of starting my business?
The Business Gateway website and other official sources have guides, videos and tips on all
aspects of starting up a business in Scotland. Follow the links below to explore each resource:
Promotion
BG guide to Sales & Marketing
(www.bgateway.com/marketing)
Legal Help
Gov.uk “Licence Finder” tool
(www.gov.uk/licence-finder/sectors)
Training
Skills Development Scotland’s My World of
Work (www.myworldofwork.co.uk)
Funding for training
(www.myworldofwork.co.uk/section/funding)
Premises
Law Society of Scotland’s “Find a Solicitor” tool
(tinyurl.com/66vu8hd)
NovaLoca property search database
(www.novaloca.com)
Accountancy
Small Business Bonus Scheme 2013-14
(tinyurl.com/cxrg64e)
Institute of Chartered Accountants of Scotland’s
(ICAS) “Find a Chartered Account” tool
(icas.org.uk/FindaCA/)
Insurance
Pricing
Department for Business Innovation & Skills’
Pricing Practices Guide (tinyurl.com/cwasotw)
A guide to business insurance from
Finance.Scotland (tinyurl.com/d54entl)
HSBC Guide to Pricing
(http://tinyurl.com/onuaqur)
Funding
Please note: the most effective way to
research pricing is to conduct your own
research – visit wholesalers or suppliers to
obtain price lists, find quotes from similar
companies and work out what other businesses
in your area are charging.
Practical information on finance and funding for
starting and growing your business
(www.finance.scotland.gov.uk)
Your local Business Gateway can offer events, workshops and advice on all aspects of starting your
business. Call the helpline on 0845 609 6611 to find out what is available in your area.
We hope you find this Market Insight useful and we’d love to hear your feedback at
www.surveymonkey.com/s/33VQHR9. If you would like additional information on anything contained
in this guide, or if we can help with anything else, please contact us on 0845 609 6611
or email info@bgateway.com.