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January 28, 2019

British foodservice industry visits predicted to fall, research finds

Figures from global information company The NPD Group show visits in the British out-of-home (OOH) or eat-out foodservice market will decline in 2019 and 2020.

By Rosie Lintott

Figures from global information company The NPD Group show visits in the British out-of-home (OOH) or eat-out foodservice market will decline in 2019 and 2020.

The market peaked at 11.35 billion visits in 2017, but dropped 0.5% to 11.29 billion in 2018. The research predicts that despite population growth of +0.6% per annum, there will be a further drop of -0.5% in 2019 and another -0.1% in 2020 to reach 11.23bn visits.

However, NPD predicts a +5.0% increase in spend to £59.47bn by end of 2020, against the £56.62bn for 2018. These figures will mainly be driven by operators increasing menu prices as they respond to cost pressures, including inflation. The average individual cheque reached £5 in 2018 and will rise an additional 5.6% by 2020 to £5.30.

A key trend in British foodservice is the decline of the on premise sector where food and drinks consumed where purchased versus off-premise; delivery, takeaway, grab ‘n’ go and drive-through. This is the result of the long-term decline in retail footfall as more shoppers purchase online.

NPD predicts a better performance in the off-premise sector with visits expected to reach 7.21 billion visits by the end 2020, 4% higher than in 2018, while spend is forecast to jump +10% to £27.87bn. NPD forecasts takeaway and grab ‘n’ go visits will increase by 1.6% and spend will go up 6% by the end of 2020.

The NPD Group insights director Dominic Allport said: “The pressures affecting on-premise eating and drinking is a big theme in British foodservice. The old habit of going shopping and finding a place to sit down and eat is on the wane as more people shop online.

“We are predicting that all the meaningful growth in foodservice will be ‘off-premise’ and this is where the industry will address the decline on the high street. We forecast that the modest growth in the large takeaway and grab ‘n’ go channel, supported by the continuing delivery revolution, is enough to provide 85% of the growth in spend over the next two years for the entire British foodservice industry.

“The growth of drive-through is part of a trend towards more convenience and a result of consumers spending less time on the high street. But operators must address the big price gap between on premise versus off-premise. The average on-premise cheque of £7.17 is nearly twice the £3.66 seen for off-premise purchases. Is that good for the industry?”

The research found that visits originating digitally, i.e. customers using digital kiosks or order screens in foodservice outlets, or ordering online or via apps for delivery or takeaway/grab ‘n’ go ,will exceed 1 billion per year for the first time by the end of 2020. The use of apps in particular is expected to continue to increase rapidly by 88% between now and the end of 2020.

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