Eating-out value growth to reach pre-recession levels

By Mark Wingett

- Last updated on GMT

Allegra Foodservice forecasts that the value of UK eating-out market will grow by 2-3 per cent over the next year
Allegra Foodservice forecasts that the value of UK eating-out market will grow by 2-3 per cent over the next year
Emerging fast food concepts, coffee shops and the further proliferation of the street food movement are set to drive the UK’s eating-out sector in 2014, with the market forecast to grow 3 per cent in value over the next 12 months to £82.5bn - the highest level of growth since the recession. 

That's according to Allegra Foodservice’s latest Eating-Out Market review, which notes that the foodservice industry has been supported by an improving economic outlook, strengthening consumer spending power and increasing physical expansion. This has led to growth figures being revised upwards, from a previous figure of 2.1 per cent.

The research into opening programmes of branded restaurant and managed pub chains also found accelerating expansion from 4.5 per cent in 2013 to 5.5 per cent in 2014.

However, findings from online, in-depth interviews with senior executives across the sector by Allegra found that although they forecast that the value of UK eating-out market will grow 2-3 per cent over the next 12 months, the majority believe that a full economic recovery will not take hold until the second half of 2015.

The research found that the industry is positive about current trading condition and that three-quarters expect to see trade improve further during 2014.

Executives put forward intensifying competition as a core business challenge overtaking concerns around rising food costs. They also said they had long-term growing confidence around increasing eating out activity – despite ageing demographic trends, and that building stronger customer loyalty will be a critical success factor.

Confidence boost

The research highlighted that the pub market continues to polarise, between premium operators with a point of difference and more traditional pubs with “non-descript” food offers.

Simon Stenning, Allegra Foodservice strategy director, said: “Eating Out market value growth of 3 per cent in 2014 will be the highest since the recession began and clearly welcome news. 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. 

“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 customer experience to build stronger customer loyalty.” 

Stenning said that the key consumer trends that operators need to embrace, include an enduring recessionary legacy and growing requirement for informality, together with the continuing requirement for menu engineering and premiumisation.

This story was first published by one of our sister titles, M&C Report.​ To subscribe, contact Emily Croft on 01293 846578 or email emily.croft@wrbm.com. 

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