Independent restaurants still account for a dominant portion of eating-out demand in Western Europe, particularly in Spain and Italy, making the region a historically weak area of development and growth when it comes to home-grown chains.

In markets like the United Kingdom, where local chain players are highly relevant, they are often found in relatively unique segment categories, and many are not easily exportable. The classic example of this can be found in the U.K. pub category, where pub chains are enjoying increasing demand. Two of the largest Western Europe-based companies, JD Wetherspoon PLC and Mitchells & Butlers PLC, are pub operators that collectively accounted for nearly $4.4 billion in 2012 sales — virtually all of it confined to the U.K. market.

Exceptions do exist. Costa Coffee, a U.K.-based coffeehouse concept, can now be found in more than 25 global markets, competing head-to-head — and effectively — with Starbucks in almost all of them. Similarly, Italy’s Autogrill SpA is a dominant force in the world of travel foodservice, operating a large stable of in-house brands in airports, railway stations and along highways around the globe. The company is also one of the world’s largest franchisees, operating travel locations for brands such as McDonald’s, Burger King and others.

Data

• Chains by sales, growth
• Chains by worldwide units, growth
• Companies by sales, growth
• Chains by estimated sales per unit

Still, the trend toward more localized restaurant players seems to be intensifying, even as fortunes for chain operators remain relatively positive despite the grim economic conditions found across the region. Overall unemployment in the eurozone continues to rise and has surpassed 25 percent in both Spain and Greece. While this has had a devastating impact on overall spending on eating out, it has created real opportunities for chains that offer a streamlined, modernized take on the familiar and the affordable. For instance, two of the fastest-growing chains in Western Europe over the last two years, France’s La Pataterie and Spain’s Cervecería 100 Montaditos, have menus that focus on baked potatoes and sandwiches, respectively, consciously positioning themselves as a place for an unpretentious, affordable meal.

At the same time, both of these chains are very deliberately positioned toward consumers in their home markets, suggesting that the story in Western Europe over the next five years will be a continued push toward serving local customers with the affordable and the familiar. This is not necessarily a negative for the growth prospects of the largest global chains — McDonald’s has, after all, emphasized localization as part of its Western European strategy — but it likely means there will be little change in the sales ranks of the very largest local operators in the next few years. Instead, much of the innovation and growth is likely to come from within the ranks of the small to mid-sized chains, which are expected to become more prominent over the next 10 to 15 years. 

By the numbers

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