The market is expected to grow in value by 1.8%, a figure that has been revised down from the 2.24% forecast in February, according to the latest analysis from Lumina Intelligence.
Lumina describes the growth in real terms as being ‘inflation driven’ and being reflective of price rises but declining penetration.
Geopolitical tensions coupled with record low consumer confidence have heightened financial anxiety, translating to cutbacks on eating and drinking out, while operators have been hit with the rising cost of goods, labour, and business rates, it says in its UK Eating Out Market Report.
Overall eating out participation has declined to 56.8% - down 1.3ppts - but frequency is rising among 25-35 year-olds.
“Growth is being driven by affluent, younger audiences-particularly 25–34s and £100k+ households while lower-income and older groups disengage,“ says the report. ”City centres, especially London, are rebounding, fuelled by return-to-office trends and a higher concentration of premium, high-frequency consumers.”
Restaurants and pubs have been the most affected this year, with service-led restaurants seeing falling market share of 1.6ppts and pubs seeing a 0.7ppt decline.
The picture is better in the QSR, food to go and coffee shop sector, with branded operators better placed to perform well through procurement leverage, technology and format flexibility, says Lumina.
“These are advantages that independent operators cannot replicate under rising operational costs.”