The total UK foodservice and hospitality market will grow 1.8% this year, analysts predict.
The increase in sales will propel the market’s value to £79.7bn and set it on the path to becoming a £90bn sector by 2018.
“There will be a positive growth of 2.4% CAGR over the next five years,” said Anya Marco, director of insight at Allegra Strategies, which released its annual ‘Eating Out in the UK’ report this week. “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.”
Allegra believes there are 326,000 foodservice and hospitality outlets in the UK and said the sector was on track to outperform the retail market, which is only expected to grow 0.3%.
It said the expansion is being 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.
Over the next five it anticipates that there will be 337,000 foodservice outlets in operation, with branded and managed pubs predicted to be the winners, taking a further 2.1 percentage points of share in turnover.
Allegra said this would represent a “remarkable turnaround”, demonstrating 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 market share, according to Allegra. It forecasts a decrease of 3.4 percent points of turnover and 1 percent points in outlets over the next five years.
Allegra’s research suggests that 19 million UK adults now visit eating out establishments at least once a week, rising from 17 million last year.
However, there is a slight decline in the frequency of visits on a monthly basis, with 2012 results indicating that one in eight meals were eaten out, compared to one in 8.5 meals this year. Allegra said that volatile weather conditions at the start of 2013 impacted visit frequency.