The 2013 ‘Eating Out in the UK’ report shows the evolving UK eating out market delivering continued growth in 2013 despite ongoing pressures on consumers and the industry, with branded operators continuing to grow at the expense of independents.
Overall, the total UK Foodservice and Hospitality market will achieve 1.8% sales growth in 2013, reaching a total of £79.7bn, and is set for further positive growth over the next five years adding over £10 billion in value to reach £90bn by 2018
Definitive report
Allegra Strategies’ Food Strategy Forum held an exclusive debrief for Forum members for the launch of the 2013 ‘Eating Out in the UK’ report. It is the 5th year that Allegra have produced this definitive report on the total UK foodservice and hospitality market, which surveys over 2,000 UK consumers on their eating out habits, and interviews over 150 CEOs and other senior executives of major industry players. Insight and analysis is also drawn from 36,000 consumers surveyed as part of Allegra’s EatingOut™ Panel.
The 2013 report identifies the size of all the sectors of the market, by revenues and outlets, ranging from cost sector catering to coffee shops to fine dining. Analysis of the market from 2008 through to 2018 identifies the sectors that are gaining share, such as branded restaurants and coffee shops, and those that will continue to grow over the next 5 years.
Anya Marco, Allegra’s Director of Insight commented, “There will be a positive growth of 2.4% CAGR over the next five years. This will be driven by physical expansion, improved consumer confidence with higher anticipated average earnings growth combined with lower inflation rates leading to trading up.”
Market out-performance
The 326,145 outlet-strong UK Foodservice and Hospitality market shows 1.8% sales growth and 0.9% expansion growth for 2013, outperforming the UK High Street retail sales growth forecast of only 0.3%.
Growth is led by robust trading performances by coffee shops, sandwich chains, and the branded restaurant sector (including branded fast food, branded pubs and casual dining restaurants).
Eating out is the new normal
Eating out has become the new normal, with 19m UK adults visiting eating out establishments at least once a week; this has risen from 17m since 2012. However, there is a slight decline in the frequency of visits on a monthly basis where 2012 results showed us that 1 in 8 meals were eaten out, compared to 2013 where 1 in 8.5 meals are eaten out.
Volatile weather conditions at the start of 2013 have impacted visit frequency. Lunch is consumed on average 4.2 times per month out of home, declining by 6.6% on last year. Average monthly dinner out of home declined to 2.5 meals per month in 2013 compared with 2.7 in 2012.
Rising trend for Breakfast
One important growth area however is Out of Home Breakfast, which is a rising trend, increasing slightly in the first half of 2013 compared with 2012, to 1.8 meals per month per person, from 1.7.
Average spend: consumers still cautious
Average spend on Breakfast has increased to £4.77, from £4.66 in 2012. Lunch spend has increased to £7.39 in 2013, compared with £7.22 in 2012. However, average spend at dinner declined to £17.89 per person, from £18.11 in 2012; this reinforces the point that economic pressures are still influencing consumer behaviour.
Consumer confidence has stabilised in the past year though, with fewer consumers feeling negative about their future income levels, 39% in 2013 compared with 45% in 2012.
But, consumers are defensive about spending, albeit less so than last year; 53% say they spend cautiously when eating out, compared with 62% in 2012. The report also identifies that 56% of consumers tend to look for a meal deal in order to get good value when eating out, but that 1 in 3 consumers ensure they have enough money every month to eat out, reinforcing the fact that eating out is the new normal.
Eating out growth: £10.3 billion
Allegra estimates significant £10.3 billion growth over the next five years for the UK foodservice and hospitality market, reaching a total turnover of over £90 billion by 2018, representing compound annual growth of 2.4%.
This is assisted by growth in outlets over the next five years, with compound annual growth rates of 0.7%, reaching in excess of 337,000 outlets by 2018.
Winners and losers over next 5 years
Branded and managed pubs are the winners over the next five years, taking a further 2.1 percentage points of share in turnover. This is a remarkable turnaround which shows that consumers still love and appreciate the qualities of the British Pub, albeit those that provide a great value quality food offer.
Coffee shops and sandwich bars will increase share of turnover by 1.6 percent points, driven by physical expansion, together with an increasing market share of outlets by 1.1 percentage points over the next five years.
Independent restaurants will be hardest hit by the growth of branded concepts, and risk losing significant share of the market, Allegra forecasting a decrease of 3.4 percent points of turnover and 1 percent points in outlets over the next five years.
Key future trends
All day eating, the importance of adding value beyond price, and the rise of the era of the individual are key future trends that will impact the foodservice industry. Operators that embrace these key major trends and food trends are well positioned for success.
The full, final report will be launched on 5 August 2013. The Eating Out in the UK Report 2013 is provided to members of Allegra’s Food Strategy Forum and is also available for purchase.
For more information, please contact:
Simon Stenning, Foodservice Strategy Director, Allegra Strategies
+44 (0) 20 7691 8800
About Allegra Strategies
Allegra Strategies is a London-based strategic research consultancy recognised as a global leader in the foodservice and coffee shop sector. Allegra Strategies’ leading-edge research and thinking assists growing companies to develop and improve performance.
For more information about Allegra Strategies click here
About the Food Strategy Forum
Allegra’s membership organisation is the leading provider of market intelligence for the UK foodservice market, with an annual program delivering Thought Leadership, Analysis and Briefings to members stretching across all sectors of the market, both operators and suppliers.
For more information about the Food Strategy Forum click here