The UK foodservice delivery market, which includes fast food, restaurants and pubs, is expected to reach a total value of £14.4bn in 2023, according to Lumina Intelligence's Foodservice Delivery Report 2023. The market is projected to grow by +7.8% in 2023, driven by wide-reaching investment in delivery services, including the development of aggregator platforms, optimisation of brand sites and prominent marketing activity. Whilst high inflation and increases in fees will contribute to the market's growth, the report highlights that volumes may suffer as cost-conscious consumers reduce market penetration and frequency in 2023. In fact, 57% of those not ordering delivery are doing so to save money.

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The majority of consumers (81%) are planning to stay in a UK hotel in 2023, as cost-of-living pressures deter them from taking trips abroad, according to the latest GO Technology report from leading hospitality tech provider Zonal and insight firm CGA by NielsenIQ. The survey of more than 2,000 UK consumers highlights the continued opportunity for domestic hotel visits in 2023, with nearly half (44%) of consumers saying that they will avoid hotel stays overseas due to cost-of-living increases. A further 39% said they’d be ‘staycationing’ simply because they would prefer to travel within the UK rather than abroad this year, up 12% from 2022. Furthermore, for consumers choosing to holiday in the UK.

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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.

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The majority of business leaders across the grocery retail (54%) and eating out market (58%) are expecting trading conditions to get worse until at least July 2023, according to Lumina Intelligence’s new Wholesale Market report. The study revealed that many wholesale customers will be seeking out support from businesses and government as consumer discretionary spend will be hard fought for across the next 6 months. The squeeze on household budgets has been highlighted by business leaders as the most important long-term consumer trend impacting eating out and grocery this year. Consumer confidence plunged to a new low of –49 in September 2022, boosted by +2 points in October following the announcement of an energy price cap.

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The convenience sector is set to grow to £48.6bn by 2025, up £3.4bn on from the total value of sales in the year to March 2021, according to The Local Shop Report from the Association of Convenience Stores (ACS). The ACS report also shows that across the UK’s 48,590 convenience stores, £605m was invested over the last year in areas such as refrigeration, shelving, store signage and internal building maintenance, 62% of which was funded through retailers own reserves. Within the past year, 73% of independent retailers have also invested in their local community, with the most common form of engagement through collecting money for charity. Some 36% of independent retailers, this has also involved donating to food banks which have seen referrals double since 2019.

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The UK convenience market is forecast to reach a value of £45.2bn in 2022, growth of +3.2% versus 2021, according to the new Lumina Intelligence UK Convenience Market Report 2022. This follows a small decline in 2021 of -0.8%, as market growth slowed as a result of hospitality reopening and coronavirus restrictions easing. The market is also expected to see positive, albeit modest, outlet growth at +0.6%, with a post pandemic property boom creating greater prospects for operators to expand. Co-operatives & convenience multiples set to outperform the market Co-operatives and convenience multiples are expected to grow turnover by +5.6% and +3.8% in 2022, respectively. This growth will be underpinned by investment in store refits and physical expansion.

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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.

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The UK food-to-go market (FTG) is forecast to increase by 31.8% in 2022, to a value of £21.3bn, according to the new Lumina Intelligence UK Food To Go Market Report 2022. This will see the market fully recover to and exceed its 2019 pre-pandemic market value and follows growth of +38.2% in 2021 (a value of £16.2bn). Key FTG channels expected to exceed 2019 turnover in 2022 Key FTG channels - including convenience and supermarket grab and go, coffee shop/cafes, as well as travel - are expected to exceed 2019 turnover in 2022. Branded traditional fast food is expected to have a slower recovery, with delivery gaining large proportions of key operators including McDonald’s and KFC’s sales mix.

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The UK foodservice delivery market is expected to total £14.6 billion in 2025, with robust growth of +3.2% per year from 2022-2025. The branded traditional fast-food channel is expected to lead value growth in the market from 2022-2025, with leading players including McDonald’s and KFC focusing on leveraging delivery. The channel is expected to hold an 18% share of the market in 2025, up from 8% in 2019. Blonnie Whist, Insight Director at Lumina Intelligence said, “'After two years of on-off restrictions across the UK eating and drinking out market, the use of foodservice delivery has become habitual to consumers, with no sign of demand waning over the coming years. 'As a result, it is no longer an either/or scenario for operators.

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The UK restaurant market is set to recover to 94% of its 2019 value this year, according to the latest report from Lumina Intelligence. The study indicates that the UK restaurant market grew 25.9% or £2.3bn in 2021 to a total value of £11.2bn. Coronavirus restrictions in the first half of the year, including no dine-in trade until early April and outdoor only trade until late May, hampered recovery in the first six months of the year. Outlet decline continued in the market in 2021, at a rate of -2.8%, seeing a net loss of -817 sites. In 2022, the report predicts year-on-year growth of +59.4% or £6.6bn to a value of £17.8bn. Outlet decline in the market is expected to ease to -2.1% in 2022.

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Many Brits will be looking to head out to other countries as the restrictions are lifted, but staycations are still expected to remain popular with further development in coastal holiday destinations and areas of outstanding natural beauty. London and Major Cities will take longer to recover from the pandemic, with less inbound tourism having a major effect as well as the decline in corporate travel. The technology that business’s have had to adopt due to the travel restrictions will mean the need for face to face meetings and business travel is no longer as prevalent. Although some of this business will be restored it is unlikely to be back at the levels of pre-Covid for many years, if ever.

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Caterlyst Insights looks into the future for the hospitals in the UK: • 40 new hospitals being built by 2030 will include 21-st century catering facilities including restaurants, central kitchens, patient dining spaces and ward kitchens • Changes in hospital menus and production to reduce waste, and air miles • An increased focus on catering for outpatients • Conversion of locally managed catering to the centralised buying power of foodbuy • Healthier more nutritious meal options for patients, visitors and staff • A growth in self-pay private acute medical care driven by long NHS waiting lists and a greater awareness of available private services. (image: Medirest)

According to Caterlyst Insights, the outlook for the sports sector will see food choices taking an even more important role in generating sales. • More focus on catering as a revenue stream across all big stadia and venues, both from sports days and conference and events • As different meal occasions are covered by these venues a range of both own branded and branded ingredients will help to differentiate the quality of the offer • For match day catering, in particular football and rugby, the focus will continue to be on speed of service and simple menus • The demographic of consumers visiting Stadia will continue to evolve to include more affluent white collar workers and therefore the choice and quality of the food offer will be developed to cater for this set • Sports with longer dwell times such as horse racing and traditional cricket matches.

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Caterlyst Insights has predicted the following for the Travel sector which has been one of the hardest hit by the pandemic: • As more of the world is vaccinated, more opportunities to travel will become available. In the short term, staycations will continue to be big business, filling our roads and rail infrastructures to capacity. • Consumers busy, time-poor lifestyles are driving an overall growth in the food-to-go industry - this in turn will have a significant impact on this sector. The convenience of grabbing a portable, healthy meal on-the-go and eating it on public transport, in thecar or at the point of destination will change and increase the demand of what is on offer at train and roadside transport hubs.

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Coffee shop and cafe sales are expected to return to pre-pandemic levels by 2024. Caterlyst Insights predicts that more mergers and acquisitions are expected in the short to medium term amongst the small to medium chains. The end of the rent moratorium which was extended to March (2022), is likely to create a contraction in this sector if further measures are not taken to protect operators. Delivery will be here to stay, and many operators will look to increase consumer spend by extending their food and day part offer. The fifth wave of coffee shop brands will expand their offer and blur into an all day and evening location serving alcohol and cocktails. Diversification into retail, for the consumer to 'enjoy at home' will be seen via subscription boxes and mainstream retail outlets.

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Caterlyst Insights has revealed that a further retrenchment of the big chain restaurants is expected in the short to medium term while struggling, dated brands reasses their portfolios. We have seen this already with high closures across the TRG brands – Frankie & Benny’s (110 sites) and Chiquito’s (64). Stemming the overall decline will be smaller, emerging brands taking advantage of site availability and re-worked rent agreements backed by investors already eyeing the opportunities within the market. 2022 is set to be a catalyst for the omnichannel. Restaurant operators and investors into the industry will no longer just look at growing revenue through opening new sites, but how they can extend into different markets and truly maximise the value of the brand.

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Caterlyst Insights has predicted the following for Contract Catering: • Clients continuing desire for transparency when it comes to food and beverage sustainability and provenance is to drive more locally sourced products and ingredients • Increased focus on reducing carbon footprint, including reduction in food waste and single-use plastics • Accelerated use of technology, facilitating click & collect and delivery services • Personalisation of dishes, including ingredients, portion size and pack format • Focus on health continues with more choice in regard to plant based dishes on menus • Diminishing self-serve and buffet-style service, replaced by individual portion packs • Street food will not only continue to influence contract caterers own offer.

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Caterlyst Insights has predicted the following for Public Sector: • MoD remains an important sector for those contract caterers that specialise in this area • Canteens and cafes in MoD sites need to compete with the high street driven by PAYD • A sector that will experience minimal growth or decline, will not be effected by economic turbulence • Health and wellness alongside more plant based meal options will be a focus within both MoD sites and HMP sites • Centralised and standardised menus for UK prisons • More focus on nutritionally balanced dishes and menus including brain health within prisons • Continued pressure on costs within the prison system (image: https://prisonjobs.blog.

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Caterlyst Insights has looked at what we can expect from workplace catering in the months ahead and beyond: • Contract caterers having to offer a more flexible approach to contracts, such as three/four day-a-week service & short-term contracts • More employees wanting fluid eating times, no longer traditional day parts • Flexible canteen space that is also designed and used as a collaborative meeting space • Vending solutions willl offer a wider range of all-day dining and snacking products • Click and collect and deliver to desk will grow, potentially from central production units providing greater choice of personalisation • Street food pop-ups and food-to-go will continue to trend • Focus on health continues and more choice with regard to gluten free.

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Here's what is cooking at education sites this year: • More schools choosing to become Academies giving them more autonomy over food provisions – could in turn lead to a growth in purchasing via buying consortiums • Secondary schools moving away from hot meals and move towards a more convenient food-to-go / street food type offer • The focus on health continues and more choice with regard to dietary requirements, gluten free, dairy free etc • Plant-based and vegan dishes will grow in number of options available, especially in HE environments • Sustainability will continue to be a focus, both from a packaging perspective and choosing locally sourced ingredients • Branded operators will look to Universities as another route to grow their site portfolio ie.

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