According to the new Lumina Intelligence UK Eating Out Market Report 2022, the UK eating out market is predicted to value £95.2bn in 2022, +4% versus its 2019 value – meaning that inflation is outpacing market growth. Outlet growth is expected to be positive from 2022, at a compound annual growth rate (CAGR) of +0.5% from 2022F-2025F, up from the -0.5% from 2019-2022F. Low ticket channels including coffee shops, sandwich & bakery and fast food are gaining outlet share of the market post pandemic. Retail, travel and leisure best performing segment of the total market Versus 2019, retail, travel and leisure is set to be the best performing segment of the UK eating out market, growing at +9.1% against its 2019 value. In comparison, hotels, pubs and restaurants are set for growth of +2.8% versus 2019 and contract catering growth of +3.4%. At a value of £68.7bn, hotels, pubs and restaurants is the largest segment of the UK eating out market, but is also set to see the slowest recovery, with continued outlet decline and dampened consumer confidence impacting footfall in the segment. Top 10 UK eating out brands to grow +17.1% in 2022 The top 10 UK eating out brands are set to be worth £15.2bn in 2022, with McDonald’s the biggest in the market. Brands including KFC, Greggs and Domino’s are expected to see turnover recovery from 2019 upwards of +20.0%. As a group, the top UK eating out brands command a market share of 15.9% - a decline of -1.3ppts versus 2019. UK eating out market to be worth £102.8bn in 2025 The eating out market is forecast to total £102.8 billion in 2025, representing a compound annual growth rate (CAGR) of +2.6% from 2022F-2025F. Inflation is forecast to sit between 2.5% and 2.0% from 2023-2025, meaning there will be little volume growth in the market to 2025. There is a £5.7bn size of the prize for the top 10 sub channels from 2022F-2025F. Managed, branded and franchised pubs are set to lead in absolute value growth. Senior Insight Manager at Lumina Intelligence, Katie Prowse, said, “Operators across the UK eating out market will be buoyed by the end of the pandemic and the impact of a year’s trading without restrictions. However, the reality will not live up to expectations, as operators face rising costs, staff shortages and squeezed household incomes. 'We are already seeing the impact of these in the data, with spend growth and penetration both slowing. Operators face a significant challenge managing costs, as well as attracting footfall.” “Despite the challenges, there will be opportunities. This £5.7bn opportunity between 2022-25 shows the size of the prize for brands. Delivery, premiumisation and digitisation all continue to be key trends shaping the future of eating and drinking out. Delivery continues to grow its share of the total eating out market.” (source: https://www.lumina-intelligence.com/, image: pexels)