Restaurants and bars to see more takeover activity in 2012

The UK's restaurant and bar sector is likely to see a "significant increase" in mergers and acquisitions activity in 2012, according to accountancy firm BDO.

BDO said that a combination of private equity interest, strong chains looking to cash in and banks offloading repossessed assets would stoke the activity.

Its Restaurant and Bars Report said that although sales increases across the sector were expected to be minimal, big high street names like Pizza Express, Côte, Giraffe, Yo! Sushi and Jamie Oliver's restaurants could change hands in 2012 as buyers move to be in place before the predicted growth of 2013 and beyond.

David Campbell, the head of BDO's restaurants and bars team, said private equity firms were eyeing up the sector's star performers.

"While the economic climate is not great, going out is part of the fabric of our society. The difference is when people do go out now, they are more demanding about the quality of the experience they receive. Tired venues serving overpriced food are living on borrowed time but the chains that are thriving will continue to do so next year.

"Food prices are starting to fall and many high street landlords see food and drink businesses as a safer bet than retailers. The good operators are in a great position for when financial pressures start to ease in 2013 and consumers start to feel they have more disposable income."

Other predictions from the report included an increase in calorie and alcohol information on menus and big changes on the high street as pop up and mobile units increase. The report also predicted that technology would become more widespread in restaurants and bars as free Wi-Fi becomes the norm.

By Neil Gerrard

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