Rising cost of living to hit spend in foodservice in 2023, says report

The report states that there will be a challenging year ahead for the hospitality sector, with even consumers in higher income groups starting to make changes to spending as fears over increasing energy bills and mortgage repayments starting to impact behaviour.

Its research found that 89% of British diners look to save money by eating out differently in 2023. This includes seeking out money off vouchers (47%), skipping a starter (45%), choosing a cheaper main course (44%), forgoing a dessert (43%), drinking tap water (28%) and leaving a smaller tip or no tip at all (21%).

Only 11% say they will not be using any tactics to save money.

The total food and drink market across eating in and out is forecast to have grown 6.6% this year compared to 2021, with further growth for 2023 expected to be 5% in 2023. However, when inflationary price increases are stripped out, this equates to a 2% decline this year against 2021, according to IGD.

The report also states that while UK’s eating out market has had a buoyant first half of the year, retail channels will start to steal share of foodservice sales in 2023 as consumers reduce their eating our frequency. Retail wins from foodservice, however, will be mostly offset by down-trading by shoppers buying cheaper products and switching to own label ones.

“In 2020 lockdowns forced a strong switch from eating out to eating in, with 2021 showing a gradual return as venues opened and consumer confidence and appetite for going out increased. However, from Q4 2022 and into 2023 there will be a halt to this trend as retail channels start to steal share of stomach from foodservice, reflecting the challenging economic landscape,” says Nicola Knight, insight manager and eating out sector expert at IGD.

“How the year finishes will depend on how consumers celebrate over the festive season.  Next year the market is likely to see more spend switch to retail and recovery stall in many sectors.”