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UK Eating out Market to be Worth £79.7bn

Sarah-Jane Lampe 5 August 2013

The UK foodservice and hospitality market is expected to reach a total worth of £79.7bn by the end of 2013, with an expected 1.8% sales growth, according to an ‘Eating Out in the UK’ report released by Allegra Strategies.

The report also predicts further positive growth over the next five years, which is thought will add more than £10bn in value to reach £90bn by 2018.

The report surveyed more than 2,000 UK consumers on their eating out habits, and interviewed more than 150 CEOs and other senior executives of major industry players.

Anya Marco, Allegra’s director of insight said: “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.”

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 from coffee shops, sandwich chains, and the branded restaurant sector (including branded fast food, pubs and casual dining restaurants).

The report has also identified that eating out has become the “new normal”, with 19 million UK adults dining out at least once a week; this has risen from 17 million since 2012. However, there is a slight decline in the frequency of visits on a monthly basis where in 2012 results showed one in eight meals were eaten out, compared to 2013 where one in 8.5 meals are eaten out.

Volatile weather conditions at the start of 2013 are thought to 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.

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 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 one in three consumers ensure they have enough money every month to eat out, reinforcing the fact that eating out is the new normal.