Eating out market set to reach £40.5bn this year

A new report from Allegra Strategies suggests that the UK informal eating-out market will grow by 1 per cent to reach £40.5bn by the end of the year, despite growth being pegged back by recession

A new report from Allegra Strategies suggests that the UK informal eating-out market will grow by 1 per cent to reach £40.5bn by the end of the year, despite growth being pegged back by recession.

In its annual Eating Out Report, Allegra said that notable trends identified as 'recession legacies' included: lower visit frequency; continued 'trading down' to lower-priced venues; and a high reliance on previous experiences when deciding what venue to visit.

In the medium term, it predicted that the market would grow to £49bn in the next five years.

The research, which was based on interviews with 2,000 consumers and about 200 industry executives, covered informal restaurants, pubs, fast-casual eateries, takeaway outlets plus coffee and sandwich chains. Allegra classified the 'informal' eating-out market as spend per head of up to £15.

It showed that customer service was 'business critical', with 78 per cent of consumers saying it was as important as the quality of the food.

Lunch remains the most popular eating-out occasion with 27 per cent of consumers having at least one lunch meal out of the home per week, compared to 18 per cent for dinner and 8 per cent for breakfast.

Discounting to become a permanent feature

Allegra said it expected discounting to become a permanent feature of the market, albeit that offers would evolve, becoming more targeted and designed to deliver specific business goals. 38 per cent of consumers were regularly using discount vouchers – 8 per cent said discounting was the main driver of their visit.

Health is very much on the radar for many consumers with more than half (51 per cent) claiming that healthier eating played a part in their overall approach to eating out – 35 per cent had made a conscious decision to eat out more healthily in the past year.

Half of consumers said that local sourcing was the most important sustainability initiative for foodservice operators to engage in.

Industry executives told Allegra that healthier eating and local sourcing would be the greatest driver of menu development over the next three years.

VAT rise an obstacle to growth

One of the most obvious hurdles to growth in the eating-out market was the VAT rise to 20 per cent in January 2011, said Allegra, which would serve to widen the gap between eating in and going out.

The research house also said that the ageing population would hamper growth, with eating out less prevalent in older consumer segments – younger adults aged 18-24 had the greatest visiting frequency, eating on average 3.3 meals per week, compared to 1.2 meals out of home among the over-65s.

The surveys were carried out between April and June, 2010.