It should be noted that the Russian market for public catering experienced the deterioration in economic indicators in late 2014 and 2015 to a degree to which no other market did. However, today’s conditions in the catering market have been adapting to the new realities of the Russian economy, connected with declining household incomes, the imposition of the food embargo, growth in costs of imports and a number of other factors.
At the moment, the fast food and street food formats constitute the most steadily growing segments of the catering market. These segments are characterized by stable effective demand. Establishments within the mid-price range, namely casual dining restaurants, are the most susceptible to changes in the level of household incomes. Said segment strives to adapt to consumer demands, offering varied menus with dishes at affordable prices.
In 2017, the middle segment of the market was stagnating.
In 2017, the volume of the public catering market in Russia increased by 5%, amounting to approximately 1.42 trillion rubles. The vector of market dynamics directly correlates with both financial crises in the Russian Federation, which is indicated by retrospective dynamics for 2008–2017.
The retrospective dynamics of real household incomes were less pessimistic, however. The decline in expenditures began in 2014 (0.7% compared with the similar indicator of the previous year) and reached its bottom in 2016 (-5.8% to the similar indicator of 2015), whereas 2017 marked the start of a trend towards growth (-1.7% against the similar indicator of the previous year).
According to the Russian Federal State Statistics Service (Rosstat), 80.6 thousand restaurants were operating in Russia in early 2017, occupying the total area of 10.2 million square meters. According to estimates, the indicator increased by 6.2% in 2017, amounting to 85.6 thousand units. A retrospective analysis of 2009–2017 reveals that 2015 was the least favorable year in terms of the number of restaurants, caf?s and bars.
The share of restaurants, caf?s and bars in the market structure in 2017 equaled 19.7%. It should be noted that the share has not been changing dramatically throughout the past 5 years and no major shifts are expected in the near future.
Traditionally, three formats of catering establishments can be distinguished in the market:
* fast food, street food;
* casual dining;
* fine dining.
At the moment, the fast food and street food format constitutes the most steadily growing segments of the catering market. This is connected with the fact that said format is aimed at the widest audience possible. The segment maintains a low pricing strategy and retains customers through advertising and constant new additions.
Establishments within the mid-price range, namely casual dining restaurants, are the most susceptible to changes in the level of household incomes. In crisis, visitors within the middle price format begin to save and migrate to more affordable segments. This segment mainly aims to adapt to consumer demands, offering varied menus with dishes at affordable prices. In 2017, the middle segment of the market was stagnating.
The premium, fine dining format oriented towards the elite audience is the least vulnerable to the crisis and its impact. Establishments within the format offer haute cuisine and unique design. However, according to restaurateurs, this niche has already exhausted its development potential in Russia. A large number of players have been switching to mass segment formats, which are oriented towards the mass audience.
In recent years, due to changes in consumer behavior, new catering formats have emerged. In particular, the new ‘fast casual’ solution has been growing in popularity. Said segment appeared on the edge between fast food and casual dining. Visitors are offered food at low prices and a good pastime. The food is of better quality than at fast food establishments, but service is faster than in restaurants. This format will remain demanded for a long time; a large number of players in the mid- and low-price segments have been gradually shifting toward it. Coffee shops and bakeries have been adding soups and sandwiches, breakfasts and business lunches to their menus – said strategy allows them to retain customers.
The highest average check can be observed in fine dining establishments, whereas the lowest average check is demonstrated by street food outlets.
The classification of catering chains in terms of their geographic scope is represented by five groups and is as follows:
* Russia and the CIS;
According to data for 2016, the largest share of the public catering market in the number of outlets fell on local players and equaled 51.2%. Federal companies occupied 18.3%, whereas global companies had the share of 12.2%. In 2017, no major changes in the structure of participants occurred.
The highest presence of catering chains is observed in the Central, Northwestern, Southern, Ural, and Volga Federal Districts. The lowest level of network player representation can be observed in the Far Eastern, Crimean (as a part of the Southern Federal District) and North Caucasian Federal Districts.
In the short term, growth in the Russian market for public catering is forecasted. Expected growth rates in 2018–2020 are within the 6–8% range.
The main factors contributing to market growth will include the recovery in consumer confidence, increasing incomes, and the spread of the ‘food outside the home’ consumption culture.
Establishments in the economy segment will be in highest demand; the fast casual format will be popular. Establishments in the fast food segment, coffee shops, takeaway establishments, pizzerias and sushi shops will be in demand as well. There are unfilled niches within the market – in this connection, development of new establishment formats (such as healthy foods restaurants) is expected.
Market participants will continue their expansion, the Ural, Siberian and Far East Federal Districts serving as the most interesting destinations for it. Franchising will remain the main development strategy.
Research Company “NeoAnalytics”
MSc in Social Management