The UK’s foodservice industry could lose the best part of £1 billion as a result of millennial dinners turning their backs on their eating out.
The NPD Group is predicting a decrease in out-of-home (OOH) visits by consumers aged 25-to-34 between now and 2022.
An industry report from the organisation stated that OOH visits in Britain’s foodservice industry among this age group will decrease from 20% to approximately 18% of the industry total of 11.5 billion visits, equating to 155 million fewer visits annually.
The decrease in annual OOH visits is also predicted to result in a loss in annual spend of up to £800m. This would represent another strong visit decline after the big drop between 2007 and 2012 in the same age group.
While millennial dinners are likely to cause strain for foodservice operators, the NPD Group explained that there is an opportunity for businesses to plug the gap in visits and annual spend by targeting the over 50s market.
According to the report, the fast-growing demographic will account for more than 70% of the growth in the country’s population between now and 2022 according to the ONS. Total OOH visits among people aged 50+ could increase by more than 4% by 2022, approximately 130 million visits, three times faster than the total OOH market.
“Foodservice operators seeking growth in the next five years should be aware that business coming from the 25-to-34 age band, which includes many ‘millennials’, is likely to drop,” said Cyril Lavenant, foodservice director UK at the NPD Group. “Visits from this age group have been dropping since 2007. One reason is that millennials typically need new experiences and sources of inspiration that the foodservice industry does not necessarily provide.
“The 25-to-34s are also facing higher living costs than ever, especially in housing and childcare, and this is prompting them to cut back on foodservice purchases. Operators and suppliers will have to work hard to determine what could bring the 25-to-34s back to the market. But now is also the right time to think more about the needs of the over 50s. There are huge differences in levels of fitness, mobility and prosperity as people move beyond 50 and into their 60s and 70s. But this is still a big opportunity for the foodservice industry.”
Not only will the over 50s account for more visits, they are already the biggest spenders when it comes to eating out. The average bill for the 50-to-64 age group at a full-service restaurant is £13.41, higher than any of the other age bands, including 25-to-34s. The over 65s have the second highest average spend at £13.10.
Lavenant added: “Balancing lower eat-out business among 25-to-34s in the next five years with more business from the over 50s will be a challenge. But Britain’s foodservice operators have the skills to address this. Brands and advertisers in many industries are beginning to make the over 50s more of a priority and the foodservice industry should do the same.”