Wendy’s opened a restaurant in the town of Reading, 40 miles west of London, last week. The company, which left the country in 2001 complaining of high operating costs, said it would open in east London and the university city of Oxford this year. It plans to open hundreds of restaurants in the next several years, according to a company spokesman.
The hamburger chain known for its square patties joins a string of other U.S. fast-food operators including fried-chicken chain Popeyes Louisiana Kitchen, which said it plans to open its first restaurant in London this year and eventually some 350 restaurants around the country.
Lemon Pepper Holdings Ltd., the London-based franchisee of Dallas chicken chain
said it plans to double its number of British outlets to 20 by the end of this year.
Fast-food brands with expansion plans are benefiting from a glut of available sites. One in five city center casual dining restaurants—which offer table service but are less formal than fine dining—closed during the pandemic, according to trade association UK Hospitality.
“The failure of casual dining means there is an availability of sites, and some very good value opportunities,” said
director of consultants Think Hospitality.
Wendy’s is among those taking advantage of the opportunities. “There are sites we are pursuing that have always been highly sought after,” said Wendy’s chief development officer
“We are being creative with our real estate.”
While casual dining has foundered, fast-food restaurants have remained open for takeout and delivery services throughout the pandemic, and their market share has jumped as a result. Before Covid-19, they accounted for 13% of U.K. restaurant revenue, said
chief executive of UK Hospitality. During the pandemic, its share rose to 23%.
Mr. Hacon believes Britons particularly relish American fast-food brands because of their high profile and cachet. Wendy’s arrival was previewed by most U.K. national newspapers and TV stations, and long queues formed on its opening day.
“There is a degree of excitement that something which is so big and well known in a nation which we look at as being aspirational coming over here,” he said.
A big change has been the boom in food-delivery services, where profits rose by 3.7 billion British pounds, equivalent to $5.24 billion, last year, reaching a total of £11.4 billion, according to research company Lumina Intelligence. And
head of the hospitality and leisure team at consultants AlixPartners, said that drive-through restaurants have also gained significant traction during the pandemic.
U.K. restaurants reopened for indoor dining on May 17. Lumina forecasts that reliance on takeout meals will drop this year to £10.5 billion, though that would still be 37% more than in 2019.
Ms. Nicholls said international brands are attracted to Britain’s stable legal system and the fact that British consumers tend to trust big brands. “We like the reassurance of a brand, and we have grown up with them,” she said. “In continental Europe the opposite is the case.”
Mr. Hacon said the current fast-food drive has been inspired by successful launches of chains like Five Guys Holdings Inc.—which has opened almost 120 restaurants in the U.K. since 2013—and has been accelerated by the pandemic.
Another factor is that in times of economic uncertainty there is often higher demand to take on franchises.
Still, not all American restaurant brands have found favor. Denny’s Inc., a diner-style chain, opened outlets in Scotland and Wales in 2018. Its Scottish outpost closed last summer. The company declined to comment on its future U.K. plans.
U.S. brands will also need to adapt to local tastes. Wendy’s, for example, will offer more vegetarian options to appeal to British preferences. Mr. Smith added that the U.K’s growing inclination toward eating healthy shouldn’t be underestimated, so successful brands will need to include salads and low-fat meals on their menus.
head of retail and leisure research at Knight Frank, says it is too soon to say if Britain’s growing appetite for fast food will last.
The fast-food business gained last year “because we had limited options. Are we going to go back to where we were before? Probably not. We will end up somewhere in the middle.”
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