Eating out to rise over Xmas, but fall in 2010

Consumers are set to spend more on eating out in the week before Christmas than they have in any other week of 2009, but are expected to rein-in their spending considerably in the New Year, according to new research.

The study by Horizons predicted that sales will pick up next week, but will remain lower than the average 22% rise usually seen in December.

It forecast that people will cut back further in January as the reality of continued economic uncertainty and fear of unemployment kicked in, as well as due to VAT rises.

The more formal sit-down restaurants were likely to suffer most during January and February, although takeaways could see trade rise, as they did during the heavy snowfall of 2009.

Horizons' QuickBite survey of over 1,000 consumers showed that between the second and third quarter of 2009 eating out increased 8.1%, but sales were still 4.2% lower than they were during 2008.

Quick service restaurants, such as fast food outlets, cafés, and takeaways, along with managed pubs, were shown to have become increasingly popular with consumers, while tenanted pubs continued to lose market share, with the number of people visiting a pub for a meal down 11%, compared with last year.

When asked about their future eating out plans 2% fewer consumers anticipated eating out more often in the year ahead, as a result of the increasing effect of financial pressures on eating out occasions, especially amongst the younger elements of the population, and uncertainty over the future.

Peter Backman, managing director of Horizons, said: "Consumers may be planning to enjoy themselves a bit more over Christmas, but they will still be watching their spend carefully.

"Our data shows that 40% of people are ordering a starter less often, the same number are ordering a dessert less often and 27% of are opting for a shared dish to reduce meal spend. Over half of consumers said they spent less on alcohol in September than they did in June."

"Overall, the market is bottoming out - and next year may see some growth. More likely though, year-on-year figures will bounce along the bottom for most of 2010.

"However, there is a danger of some growth followed by a further downturn due to growing unemployment, more corporate failures, a hung parliament, and the much-anticipated growth in GDP not arriving which will dent confidence further."