Cheap not so cheerful as budget firms suffer

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That is the view of hospitality industry specialists Horizons in stark contrast to City analysts who have been lauding the cheap-and-cheerful end of the market for having a good recession as Britons trade down from the dearer end of the High Street.

Only this week Tootsies, the family-oriented High Street restaurant brand, was put into administration by owner Clapham House Group, while Whitbread, the giant behind the likes of £5 steak-and-chips group Beefeater and budget hotel Premier Inn, announced a 2.7% fall in sales and profits.

"Until now the UK's food service sector seemed to have survived the economic downturn better than many of us expected," said Peter Backman, market analyst at Horizons. "The news that Tootsies has gone into administration comes as a bit of a surprise.

"However, Horizons data shows consumer spend per head on eating out in the High Street dropped to £6.45 in the first six months of this year from £6.62 last year.

"High street restaurants are maintaining volume sales through discounting, so margins are sufering and this will start to show in forthcoming results."