Analysis of six months of transaction data found that restaurants are the only major food and beverage category to decline year-on-year, with spending down 3% compared to the same period the previous year. By contrast, cafés and coffee shops grew by 5%, while food-to-go increased by 2%.
The findings suggest consumers are not abandoning eating out altogether, but are becoming more selective about where they spend, says CACI. While average transaction values (ATVs) in restaurants increased by 2% year-on-year – broadly in line with inflation – the overall decline indicates fewer restaurant visits are taking place, it says.
Coffee shops have been among the biggest beneficiaries of this shift. Fast-growing disruptors such as Grind and Blank Street have significantly outperformed the market, while more established brands Starbucks and Costa also recorded healthy growth.
The food-to-go market, however, presented a more mixed picture. Expansion-focused brands including Wingstop, Farmer J, and Atis all showed strong year-on-year growth, according to the data, while more established high street operators such as KFC, Itsu, Tortilla, and Papa Johns recorded declines. The data also highlighted intensifying competition within the increasingly crowded fried chicken segment, showing that expanding brands like Wingstop continue to gain market share at competitors’ expense.
CACI also identified the new quick-service style Pizza Express concept, which opened in Brixton this spring (pictured below), and which is says is an example of an adaptation which can be made by established restaurant operators to capitalise on changing consumer habits.
Affluence-driven shifts
The research company’s demographic analysis also points towards an affluence-driven behavioural shift rather than a regional one. The strongest increases in spend per visit came from the least affluent consumer groups, suggesting that many diners are substituting restaurant meals with higher-quality café or food-to-go experiences.
Among the Low Income Living Acorn category, average transaction values at cafés and coffee shops increased by 5.2% year-on-year – the largest increase of any demographic group. Meanwhile, both the Low Income Living and Stretched Society cohorts recorded 6% growth in food-to-go ATVs and 2.8% growth in pubs and bars, with these groups posting the strongest spend-per-transaction increases across all categories.
“A nationwide, affordability-driven shift in consumer behaviour is reshaping where people choose to eat and drink out. Consumers are increasingly opting for cafés and more premium quick service experiences over full-service restaurants, and the less affluent consumers are leading the charge, suggesting many are reallocating budgets rather than cutting back on eating out altogether,” says Martha Dobbs, senior consultant at CACI.
“It’s not all doom and gloom for restaurants though, rather an opportunity for future growth. These consumer spending patterns show clear preferences, which restaurants must consider if they want to demonstrate value beyond a traditional offering.
“However, the appeal of restaurants over food-to-go concepts remains quality of experience. If restaurant brands focus their efforts on the experiential element of dining, they may just prove value and win back customer loyalty.”