Foodservice consumer confidence and eating out spend expected to rise in 2013

By Peter Ruddick

- Last updated on GMT

Related tags: Consumer confidence, Recession, Business, Peter backman

Could 2013 be the year consumer confidence grows and restaurant spend rises again? In its annual review, foodservice consultancy firm Horizons says it thinks it might be
Could 2013 be the year consumer confidence grows and restaurant spend rises again? In its annual review, foodservice consultancy firm Horizons says it thinks it might be
Restaurant operators have become 'resigned' to the economic downturn and are focusing on survival rather than growth but 2013 could be the year that changes, according to foodservice consultancy Horizons.

In its annual review of 2012, the UK-based firm said it expects consumer confidence to return and average spend on eating out to rise in 2013.

Although Horizons does not yet imagine operators will abandon discounting or innovating, managing director Peter Backman said he believed businesses would have cause for optimism in the year ahead.

“The overall position has been characterised by slow decline of the sector over the last few years – but we suspect that this has been a result of a certain amount of culling of inadequate operators," said Backman. "Some sort of bottom has now been reached or will be in early 2013," he argued.

"At some point during 2013 we expect consumer confidence to start returning and spend on eating out will start to rise again."

Careful offers

Looking back on 2012, Backman explained tough trading conditions had not just continued but served to create an opinion among hospitality professionals that they were operating in a 'new norm' where survival depends on maintaining footfall, offers and innovating menus. 

"The last few years have demonstrated that the majority of strong businesses survive, and that operators across all sectors and within the supply chain, have learned to cope. They have developed the systems, and mind-sets, that are effective in exceptionally tough times, and invested money in businesses that can actually deliver profit and growth," Backman said.

Although the Horizons MD maintained his belief that discounting would not die, he did argue restaurants would learn from the competition in the retail sector and be more careful about targeting offers and developing promotions which build loyalty.

"The continued use of vouchers and money-off deals means that the battle for consumers continues, particularly amongst mid-spend, high street operators. Operators are also experiencing competition from the retail sector, where keenly priced meal deals are still popular."

"We are unlikely to see operators abandoning discounts and money-off deals this year as consumer confidence needs to be more robust to sustain an effective price rise," he concluded.

Horizons' 2012 Annual Report - the main points:

  • UK foodservice operators coped well in 2012 despite another year of negative growth
  • 2013 offers some prospect of improvement in the market
  • Lack of growth in 2012 was as a result of low consumer confidence, unemployment fears and low interest rates
  • Intense competition and little benefit from the Queen's Jubilee and Olympic Games also impacted operator's performance
  • A bottom in the decline in the sector has now, or will soon be, reached
  • Operators will continue to innovate menus, offers and service styles in the next year - all-you-can-eat buffets are expected to form part of this innovation
  • Ethical issues such as sustainability, food provenance and ethical trading will once again dominate in 2013

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