Love them or hate them, motorway service areas (MSAs) are an integral part of our life when we are travelling the length and breadth of the UK. From Pont Abraham in the west to Folkestone in the east, Kinross in the north and Exeter in the south, the current UK estate of 97 formally signposted MSAs began life at the dawn of the 1960s, and they have changed beyond measure in that time. Gone are the silver service restaurants and table cloths, as are the “walk along with your tray” unbranded serveries that were commonplace. Instead, we are now presented with a wide range of (mainly) international brands with something to suit every palate, from the almighty McDonald’s to the more niche offerings like Chopstix or Coco di Mama. On the retail side, WHSmith continues to dominate in MSAs and, following the recent announcement, it will only be in MSAs and travel hubs that you will find one as it intends to close down its high street estate. The premium supermarket brands also have a strong foothold, with M&S Simply Food and Waitrose present in more than half of MSAs countrywide.

UK motorists travel approximately 70 billion miles per year on the motorway network alone, with total vehicle miles reaching more than 330 billion. Doing some rough maths, as a middle-aged man, I reckon I can drive for about two and a half hours before I need to consider a stop due to the call of nature. At the average motorway speed of circa 58mph, that would mean I could cover 145 miles. If we extrapolate that out, then the 70 billion miles would yield 483 million toilet breaks – the magically reliable driver of visitation for the MSA network which, regardless of vehicle or fuel type, has, and will prevail, for as long as cars don’t have onboard toilets. It’s this high level and consistency of visitation that has proved an irresistible lure for many big brands to get a presence on the motorway.

While not all MSAs are equal, there is little doubt that the quality of the offering and execution across the industry has improved immeasurably over the years. Thinking back to some of my experiences when ploughing up and down the motorways from Wales to Scotland during school holidays in the 1970s and early 1980s, there’s no doubt that the average offering today is far superior to what came before in terms of choice and quality. Indeed, many of the flagship locations are up there in quality with other travel hubs.

Many say that the food and beverage offering is “too fast food” and “not healthy enough”, but I’m not sure this is entirely fair. Speaking from my experience, you can eat very healthily in the vast majority of MSAs if you want to, especially where there’s a Leon (many Roadchef and Extra locations), but equally all of the retail offers stock better-for-you ranges, and McDonald’s offers a crispy chicken salad with 274 kcal, or a spicy veggie wrap meal with 411 kcal. You just have to look, and you will find.

It’s also an interesting perspective often levelled at MSAs, and yet overlooked in other areas. Take, for example, the Brightside concept from Loungers, which has grown to four units in the last few years and caters for locals in under-served areas, as well as tourists travelling through. You could probably put Soho House-born Mollie’s two sites in a similar bucket. They are both well-executed all-day casual dining offerings serving roadside locations, but their menus are hardly what you would call “better for you”. Yes, they have some healthier options, but I’d wager the majority of sales come through the more traditionally indulgent dishes.

That kind of makes sense to me since when you are on a long road trip, there’s every chance you might want to treat yourself, and that might explain why such a high proportion of customers on the road head for the burger over the falafel salad. There’s definitely a niche for Brightside, Mollie’s and others in rural areas along busy A roads, and I look forward to watching their growth. But the volumes and volatility of motorway sites would be challenging for them to handle, which means it’s unlikely we will see them taking over the MSA market in the near future.

The other criticism often levelled at MSAs is the pricing. Sure, there are premium prices to be found across a number of the brands, but not all are premium when compared with other travel hubs like railway stations and airports. Indeed, some brands operate with no or little premium to their high street locations, like McDonald’s and Leon. Again, there’s plenty of value if you look for it. 

The future for MSAs is an exciting one. As new battery electric vehicle (BEV) sales continue to grow and BEVs grow from their current 4% of all vehicles on the road, they have a great (if very expensive and time consuming) opportunity in providing electric vehicle (EV) charging facilities. The EV charging income will obviously substitute some fuel income and, contrary to popular opinion, the average visit time will not increase significantly when charging an EV as it’s already about the same as the average charging time.

However, it is the case that, for the medium term, BEVs will need to charge up more frequently that internal combustion engine vehicles need to fuel, so this will provide some additional footfall, which will be attractive for all kinds of brands – and I have a suspicion that smaller brands will seek the exposure and begin to feature more in the line-ups. We must always remember that one of the most popular MSA groups in the UK, Westmorland, has no major brands, and its MSAs at Tebay and Gloucester garner rave reviews.

When I started my role leading one of the three large MSA operating companies seven years ago, my view of the MSA sector was not entirely positive, based on my experiences of the past. However, I soon came to realise that the world has moved on and MSAs are, in the main, much nicer places than they ever have been. They are difficult to run, being open 24/7, and having large buildings to cope with the seasonal peaks of traffic together with vast car parks, lorry parks and roadways that cost an absolute fortune to maintain.

They are also complex businesses with commercial income streams – from advertising to kids rides and adult gaming centres to HGV parking as well as food and beverage, retail, grocery, hotel, EV charging and fuel businesses. That’s what makes them great fun to run too, and the incredibly dedicated people that make each MSA operate 8,760 hours a year are a remarkable collective.

So, whether you love MSAs or hate them, spare a thought for the thousands of people who make sure that you can get fuel, food, drink, a bathroom and a rest within 30 minutes of pretty much wherever you are on the motorway network at any time of the day or night.

“The days of building a 50-site casual dining brand are, I think, over.” It is a bold statement, but not one without merit. Pre-pandemic, the argument was building steam that the days of building/operating a 100 to 150-strong casual dining brand were coming to an end. Like most things with covid, that discussion has been moved on at a pace. The flip side has seen the increase in fast-casual operations and “premium casual” operations – see Hawksmoor, Sticks’n’Sushi, Big Mamma. The need for differentiation has seen established operators evolve into multi-brand, multi-concept platforms – see the Azzurri Group as one of the best purveyors – or newcomers tick many boxes from the start. 

A piece in the New York Times last week, under the title “Where will we eat when the middle-class restaurant is gone?”, looked into the state of the US casual dining market. The piece found that the once “rapidly growing commercial marvels” of casual dining brands have been in decline for most of the 21st century. Last year, TGI Fridays and Red Lobster both filed for bankruptcy. Outback and Applebee’s have closed dozens of locations. Pizza Hut locations with actual dining rooms are vanishingly rare, with hundreds closing since 2019. According to a February survey by the market research firm Datassential, 24% of Americans say they are having dinner at casual restaurants less often, and 29% are dining out less with groups of friends and family. Their decline has been matched by the continued growth of the fast-casual category. 

 

For new generations of consumers, the likes of Cava and Chipotle tapped into how they saw food – a means of defining their identities and values. The New York Times article elicited a response from Ron Shaich, the founder and former chairman and chief executive of Panera Bread, and current chairman and lead investor in Cava, the Mediterranean fast-casual brand, which according to US analysts, is well-positioned to outperform the restaurant industry in 2025. Shaich said: “For a long time, chain restaurants succeeded by default. ‘Good enough’ was good enough. But in an increasingly crowded market, that’s no longer the case. Consumers today are looking for real differentiation – in food quality, the price of that quality, and a dining experience that actually feels unique. That belief was central to our mission at Panera, and it’s what helped make it one of the most valuable restaurant stocks ever. It also helped define what we now think of as fast-casual dining. Simply put: the old model of ‘average is fine’ doesn’t cut it anymore. The job of the restaurant industry is to meet today’s consumers where they are – not blame them for moving on.”

In the UK, businesses are bracing themselves for further economic fallout from both domestic tax increases and US tariffs. There is a calm-before-the-storm feeling – especially for those in the middle. As recently as seven years ago, mid-market casual dining at site level was converting at 25%-plus Ebitda for mid-level sites, and top performers were regularly hitting 45%-plus. That left more than enough cash for small entrepreneurs to grow quickly and for established players to generate strong corporate Ebitda numbers with attractive multiples. However, since covid, as a sector, we’ve seen minimum wage increase by 35% (talking to a few operators, the average labour ratio in casual dining is now around 35% – it used to be 28%); energy bills have risen by around 10% on average; food costs are up by 20% (with no real signs of deflation as yet); and for some, restaurant build costs are up by as much as 50% – if you can get planning approval in the first place. All of this means that mid-level performing sites are now running at sub-10% margins and top performers are only doing about 25%, and that 10% won’t even cover central team costs. It is hard not to come to the conclusion that the model just doesn’t work anymore.

Operators have tried to deal with this by increasing prices, some dramatically. However, this is hitting volumes hard. Does casual dining have a serious volume decline problem that no one seems to want to admit? As one sector analyst put it: “When you put massively squeezed margins next to serious demand decline, the result is an uninvestable business model. You either consolidate and strip out head office costs or you run it as a lifestyle business.” Of course, there are elements at play – the role of delivery, and competition from other formats, drive-thrus and the rise of the food hall – the latter being generally cheaper, quicker, more interesting and better for groups with multiple needs. As the New York Times pointed out, Americans are spending money at restaurants as much as ever — but really, they are buying food made by a restaurant and eating it somewhere else. Takeout and delivery apps are now ingrained habits. Drive-thrus are going strong.

Operators are already looking at adjusting their strategies accordingly. As Andy Laurillard, co-founder of Giggling Squid, told me earlier this month: “In light of the changes to the national insurance contributions threshold and the fact the national minimum wage is going to continue to increase over the coming years, we are finding sites in secondary market towns are not as viable as they were, and that it is better to focus on larger sites in city centres. Do we still think we can get to 150-160 sites across the country with the expected increases in labour costs over the next four to five years? It is very doubtful. Should we invest the planned £100m of capital getting there or say £25m on a smaller number of large sites and focus on getting more out of our existing locations – through re-locations to bigger sites in the same city/town, or through extensions? This is what we are working through at the moment. We are looking at 11 capacity expansion projects and a couple of relocations.

“Beyond that, we will be looking at sites that are guaranteed to be able to make £40,000-£50,000 average sales a week if the labour model is going to work, and there are probably ten more of those outside of London that we can go after. We won’t be the only ones working through these issues and working out how they can scale up going forward. Do you look at a quick service restaurant format? The issue here is everyone looking at the same thing, and it will get very saturated very quickly, and as it’s a very different operating model, it can distract from and impact your core business. Could we go further into London? That looks hard with our current brand as most of the landlords in the capital aren’t interested in handing out prime sites to national, established brands. So, maybe we look at innovation for that. Big strategic questions then need to be addressed – it’s no longer a land grab, roll out dash for growth. The casual dining sector will be a very different place in a decade, and I want us to be playing a large and successful part in whatever remains of it – and not be one of the many casualties that I expect as a direct result of the Labour ‘growth’ agenda.”

You can understand why for many, the lure of launching overseas has grown over the last 12 months. As Nissan’s Alan Johnson told MPs this week: “It is energy costs. It is the cost of everything involved in the cost of labour [and] training. It is the supplier base, or lack of – all sorts of different issues. Ultimately, the UK is not a competitive place to be building cars today.” Or do any business, at present. So, if not abroad, then what is the next move. Laurillard, and one assumes many of his peers, will need to have difficult conversations with their backers about what the runway for their businesses now looks like, let alone an exit. Perhaps now is the time to again look at the building blocks. In 2003, the Lego Group was $800m in debt and bleeding cash. Instead of prioritising growth, the company’s new chief executive, Jørgen Vig Knudstorp did the opposite: he made Lego smaller. He saw that it had drifted from what made it uniquely special. He sold off the theme parks, cut 30% off product lines and ended licensing deals that didn’t serve the brand’s core mission – creativity through simplicity. He took the bold move of doing less but doing it better. 

After years of reading and shaking my head at headlines about the “death of the pub”, I am loath to be the one who puts forward something killing off casual dining. But it is at a crossroads, one that the last few years has sped it towards. It is still needed, and there remains a place for the category when done well. As the New York Times says: “The diminishing of these spaces, along with the rise of more atomised eating habits like delivery apps and drive-thrus, signals the decline of a cherished ritual in American life: dining out with friends and family, and the human connection it brings.” Let’s hope that the UK's casual-dining sector doesn’t go the same way.

 

Always seeking more: Speaking in the Netflix documentary “Chef’s Table: Legends” to commemorate his upcoming 50th birthday, chef Jamie Oliver said: “I wanted to disappear, run off and hide away. I was thinking, how has this all been for nothing? Maybe now we wind it up. But I didn’t feel it was my time to do that yet. As bad and as dark as this was, I’m still employing 150 people. This was definitely not the time for me to quit.” Oliver was talking about the collapse of his restaurant brand Jamie's Italian, which resulted in 1,000 job losses and debts of £72m. He went on: “The success happened so quickly. We had 4,500 staff and the wage bill was £75,000 a day – we just couldn’t afford it. I thought, ‘How can I save this?’ I tried everything. We ended up losing all the restaurants – everything that I’d built over 20 years. And it cut deep, the embarrassment and shame.” The chef admitted his failed business venture had taught him not to put all his energy into making a big “splash”. He said: “I never realised it was all about the ripples. Like, if I give a recipe or a little hack or a little tip, that could have positive ripples in your home for years and years.” Oliver has certainly been making ripples. He has grown his international restaurant portfolio to more than 70 sites, and last year saw his return to the UK market with an opening in London’s Covent Garden. He is also due to open a new cookery school and café within the John Lewis in London’s Oxford Street next month. And that international expansion continued this week. Diary hears that the business, in partnership with the Apparel Group, opened Jamie’s Italian Marassi Mall, which is its 14th site in the GCC region, with three more opening this year.

Broad shoulders: It was a case of come back to what you know this week for Phil Broad, who was appointed president of international franchising for TGI Fridays based out of Dubai. Broad previously led the brand in the UK for three years until 2000, expanding it from 20 to 42 restaurants, and achieving record-breaking performance in the process. He was also managing director of Outback Steakhouse and Starbucks UK. For the past 17 years, he has been based in the Middle East, working for the likes of Jumeirah Restaurants, InterContinental Hotels Group and, most recently, Alghanim Industries, the franchisee for Costa Coffee and Wendy’s in the region. On his new role, Broad said: “I am now delighted to be back at an exciting time for TGI Fridays International as we are in growth mode across the globe. We already operate nearly 400 locations across 40 countries and have a strong pipeline, with many more restaurants to come. I have never lost my passion and love for the brand and so look forward to playing a part in its continued success. The brand has such a strong people focused culture and I’m delighted to be working with so many talented teams across the world. Watch this space. More to come.”

Premium pubs: Earlier this year, JKS Restaurants and publican Dominic Jacobs confirmed plans to open their third pub together, in London’s Chiswick. As previously revealed by Propel, the venture, which already operates The George in Fitzrovia and The Cadogan Arms in Chelsea, acquired The Crown in Chiswick High Road. It is thought that a price of circa £3m was paid to take on the site, which will be operated by JKS and Jacobs. It will reopen this summer under the new name The Hound. JKS opened its first pub, The Cadogan Arms, in July 2021, in partnership with Jacobs and James Knappett, followed by the opening of The George, in Great Portland Street, in 2022. Dairy understands that for the 65 weeks to 31 March 2024, the two pubs achieved turnover of £7,804,767 (2022: £5,262,866) and a pre-tax profit of £811,563 (2022: loss of £630,832), while the adjusted Ebitda prior to management fees and operating lease costs amounted to a profit of £1,409,333 (2022: loss of £411,417). At the end of the period, shareholders' funds stood at a deficit of £2,053,288 (2022: deficit of £2,918,229).

Picking up the pace: Earlier today (Friday, 25 April), Propel revealed that Ludo Sports Bar & Kitchen, the joint venture between St Austell Brewery and the directors of ETM Group, is to open its “most ambitious site to date” this August after securing a location in Cardiff. The first Ludo opened in Bath in May 2023, followed by Exeter last year, with Cardiff marking the concept’s largest site to date. Located in St Mary Street, the venue will occupy the current The Alchemist site and its neighbouring unit, creating a 740-capacity flagship venue just metres from the city’s Principality Stadium. Last November, the joint venture secured £6m of funding from HSBC UK to grow its Ludo portfolio by five additional sites, with the first of these – a 400-capacity site – opening in the Guildhall shopping centre in Exeter. So where next? Diary hears that a prominent site in Bristol’s Corn Street is under consideration for the concept. One to watch.

Bellissimo: Next Wednesday (30 April), Bella Italia, the Big Table Group-owned, circa 70-strong brand, is rolling out the red carpet for all Bellas across the nation with the launch of Bella Appreciation Day. The brand is offering anyone with Bella in their forename a hefty £100 discount on their final bill. The restaurant said: “Enjoy up to £100 off if your name is Bella, Isabella, Arabella, ANY BELLA. All you need to do is head to your nearest Bella Italia and show them your ID to enjoy £100 off your meal that day.” The offer is valid for that one day only. The launch of Bella Appreciation Day is part of the brand's ‘Feel Bella’ initiative, which “celebrates the joy of dining together”.