For the first time since the pandemic, consumer spend across restaurants bounced back to 2019 highs in November 2022. This was a key finding of the latest State of the European Food Service Industry analysis announced by The NPD Group through its CREST panel. Continued hybrid working, spending more time at home and the ease of both online shopping and ordering food in has resulted in increased consumption at home however, and made it difficult for the Eating Out of Home (OHH) sector to completely rebound. Total spend in 2022 was down by 6% to €292bn (compared to €309bn for full year 2019). NPD predicts the sector to bounce back to pre-pandemic levels this year as inflation eases and Covid concerns continue to reduce. Growth in click and collect tripled in 2022. Consumers spent close to €9bn in 2022, up from €3bn in 2019. Click and collect fastest growing ‘at home’ foodservice and is expected to reach €10bn this year. Consumption of ready prepared food from restaurants, but consumed at home, is expected to remain 50% above 2019 levels will represent more than 1 out of 5 meals claimed NPD, which recently merged with IRI to create a leading global technology, analytics and data provider. While sales of food deliveries will remain way above pre-pandemic levels, the pace of growth will slow. More than a third (36%) of consumers in NPD’s Uncertainty Survey say they plan to cut restaurant food expenditure in 2023. Jochen Pinsker, the Senior Vice President of European Foodservice at The NPD Group who has tracked foodservice and consumer behaviour trends for more than 20 years commented, “Inflation impacted prices less in restaurants than in F&B retail, perhaps helped by the rapid way restaurants adapted the architecture of their offering and dropped low-margin products from their menus. 'Nonetheless, consumer confidence remains low across Europe and eating out is now perceived as expensive, with 60% of consumers claimed that prices in restaurants had increased too much for them. Seven out of 10 consumers noticed that prices increased more than they expected. As a result, people are visiting restaurants and QSR establishments less often with the number of visits down by 14% in the last year. Eating out has become a special treat.” Trading down or out and ordering less Consumers are also finding other ways to keep down the cost of the final bill. Trading down is particularly popular with people changing from casual dining to limited-service restaurants. 16% of people in NPD’s survey said they were going to a different restaurant with better prices or promotions. Going to their usual restaurant but ordering less to reduce the final bill is a strategy adopted by 15% of people who order fewer sides, starters and drinks. Sales of alcoholic drinks for example declined by 12.8% during the financial crisis in in 2009. Families and people on a low income are making deeper changes and more likely to be opting out of buying restaurant meals altogether, cook dinner at home instead, especially during the week. So restaurants that cater for weekday evening dining are likely to feel the impact and this could also slow the growth of delivery services. “COVID-19 changed work and private life forever,” continued Jochen. “Combine this with continued pessimism about the economy and healthier consumer behaviours, the disruption seen to the eating out sector structures is likely to remain for some time if not forever. 'People are increasingly eating food at home. That is a great opportunity for the restaurant industry when offering the right solution, order methods and packaging. But it is also vulnerable to pessimistic consumers when they are forced to manage their finances. Eating out has become a discretionary cost for price sensitive consumers. 'Despite this, the industry is stable, and we can expect to see further growth throughout 2023 and into 2024, when the sales for the sector may completely rebound to its pre-pandemic state. Tapping into the at home trend and managing price perception could provide further opportunities for growth.” Also covered in the report: Quick Food Service (QSR) back to growth - Overall the limited-service sector returned to growth in 2022 with sales increasing for the full year v’s 2019 up by 3% to €119bn. However, eating out connected to work or school/college/university, which represents as much as 36% of all sales in food service, continues to suffer with nearly half (41%) of EU workers working remotely and more people preparing their ‘eat out’ food at home with packed lunches and coffee to go. Finallt, healthy eating and sustainability are still a focus but not a priority when it comes to affordability. (source: NPD, image: pexels)