Delivery is a driver for the UK foodservice market

British foodservice visits growth (year-on-year) 2015 to 2019 crop
British foodservice visits growth (year-on-year) 2015 to (forecast) 2019.

Research firm The NPD Group says the British foodservice industry should grow by an additional 83m visits in 2018 (up +0.7% on 2017), despite high inflation. That should be music to the ears of distributors looking for additional kitchen outfit projects this year, as well as the suppliers providing the equipment for them.

In 2019, visits in the eat-out or out-of-home (OOH) market could grow by a further 93m (up +0.8% on 2018), says NPD. Delivery services will continue to expand rapidly and are projected to grow an additional 101m visits by 2019 (+16% on 2017). In addition, the thriving breakfast and lunch trades, alongside the popularity of burgers and the continuing casual dining boom, should help drive the increases.

Delivery has risen quickly to become a significant catalyst in the British foodservice industry. Its rapid rate of expansion looks set to continue as the likes of Just Eat, UberEATS and Deliveroo expand their reach across the country. This could encourage more foodservice operators to adopt delivery as a route to market, and NPD is predicting an additional spend of £656m (+17%) by consumers on delivery occasions by 2019.

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Much of the growth in visits will come from specific dayparts. Breakfast currently represents more than one in eight of the 11.36bn OOH visits expected by the end of 2017. NPD is forecasting breakfast visits will grow by +5.7% in 2018 and +4.8% in 2019. Meanwhile, lunch will remain the largest daypart and is forecast to grow steadily, by +2.2% and +1.9% respectively in the same two years.

In terms of the average bill, dinner is the most expensive daypart, but pressure on consumer spending will drive a continuing decline in dinner visits during 2018 and 2019. By the end of 2019, there could be 5% fewer dinner visits compared to 2016, a decline of over 134m. However, the rapid rise of delivery, providing a more affordable way of ordering from restaurants in a manner that resembles eating out, should provide some relief. Without delivery’s success, dinner visits would register a much sharper decline.

The NPD Group’s forecasts assume a ‘soft Brexit’ scenario. However, a ‘hard Brexit’ scenario would see lower visits growth at +0.5% for both 2018 and 2019. The difference between ‘soft Brexit’ growth (+1.5% over both years) and ‘hard’ Brexit’ growth (+1.0% over both years) is the equivalent of 60m visits, or £497m.

The popularity of burgers and the continuing appeal of Britain’s casual dining brands should also spur growth in Britain’s foodservice industry. Burgers are likely to retain their popularity and enjoy a boost from the delivery boom. The NPD Group expects burgers to lead growth in both visits and consumer spend. Outlets serving quick-service burgers will see visits grow by +5.1% in 2018 and +4.5% in 2019. Casual dining chains are forecast to increase visits by +2.8% in 2018 and +2.7% in 2019.

Cyril Lavenant, foodservice director UK at the NPD Group, said: “Delivery shows no signs of running out of steam over the next 2 years and will help to bring home the bacon in Britain’s £55bn foodservice industry. Burgers, casual dining, breakfast and lunch are also thriving and should help operators shrug off fragile consumer confidence, as well as inflation and stagnant wages, to achieve growth. We are especially bullish about burger chains and casual dining as these restaurants are meeting the consumer’s appetite for a contemporary experience that also offers a family-oriented treat.”

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Clare Nicholls

The author Clare Nicholls

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