Eating out sector to reach £82.5bn by 2015

By Michael Stones

- Last updated on GMT

Related tags Fast food

The rising popularity of street food is tipped to help the eating out sector reach pre-recessionary levels
The rising popularity of street food is tipped to help the eating out sector reach pre-recessionary levels
The rising popularity of street food, coffee shops and new fast food concepts will drive the UK’s eating out sector to grow by 3% in value over the next 12 months to reach £82.5bn, predicts Allegra Foodservice.

The growth will be supported by stronger consumer spending power, reflecting improved economic prospects, and the expansion of branded restaurant and managed pub chains to account for 5.5% in 2014, compared with 4.5% last year.

Simon Stenning, Allegra Foodservice strategy director, predicted the rise in the eating out market would be the highest since the recession began. “This will come from a combination of increasing consumer eating out participation, an uptick in visit frequency and some average spend gains as consumers start to feel more confident about their personal finances and spending power,”​ he said.

‘Stronger customer loyalty’

“However, the growth will be hard-fought for, in an increasingly competitive trading environment and gains will be patchy across the market. The onus on operators will remain innovating on product, refining menu price architectures and adding greater value across the consumer experience to build stronger customer loyalty.”

His conclusions were drawn from Allegra’s Foodservice Market Outlook report, based on interviews with senior executives. While 75% of those polled expected to see trade improve further this year, most believed full economic recovery would not take hold until the second half of next year.

Intensifying competition was identified as a core business challenge, surpassing worries about rising food costs. Building stronger customer loyalty would be a key success factor, most agreed.

The research also highlighted that the pub market continued to polarise, between premium operators, with valued points of difference, and outmoded pubs with ‘non-descript’ food offers.

Preference for informality

Stenning highlighted key consumer trends that required attention as being: learning the lessons of the recession and a preference for informality. Both needed to be reflected in “skilful menu engineering, with selective premiumisation”,​ he said.

Meanwhile, Charles Wilson, ceo of Booker, urged food suppliers at the City Food Lecture yesterday (February 17) to ditch supermarkets in favour of new channels, including new emerging formats such as street food.

After 60 years of strong supermarket growth, the sector was slowing down, as “the hare of the supermarkets become the tortoise”, ​he said.

“More food is being is being cooked by professionals – whether that is in fast food outlets, restaurants, the workplace or catering in institutions. People will continue to eat out of home or to have cooked food delivered to their home.”

Read more about why Wilson thinks British supermarkets are approaching their sell-by date here​. 

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