Total visits in the eat out/out-of-home foodservice market fell 1% in the first quarter of 2018 compared with the same quarter in 2017 – equivalent to 28m individual visits.
In the first quarter of this year, breakfast fell in visit terms by 1.6% against the same quarter a year earlier, and has now registered its second quarter of declining visits following more than seven quarters of growth.
Lunch visits saw a 5.1% decrease in the first quarter of 2018, against the same period in 2017 and this marks the third quarter decline for this day part, following six quarters of growth.
According to market research firm the NPD Group, this pattern of falling foodservice visits was last seen at the beginning of Britain’s 2007/2008 recession.
'Clear warning signs'
Dinner visits within the out-of-home segment have been in decline for a while. For the year ending December 2017, out-of-home dinner visits were down by 2.3% compared with the same period two years earlier.
Dinner frequency is also down, with consumers averaging 61.2 dinners in the past 12 months (for the year ending March 2018), down by 3.5% against the previous year. Lunch frequency also dropped, by 4.8% year on year (from 83.1 to 79.1).
In the recession of 2007/2008, consumers changed their consumption habits and this ended in a decline of 510m out-of-home visits annually by 2010.
NPD Group head of foodservice UK Cyril Lavenant said: “Although it is too soon to say whether we are currently in recession or not, there are clear warning signs.
“This time around, any sustained downturn would be more difficult to overcome because the foodservice industry is seeing fresh threats on top of existing operating and cost challenges."
Lavenant added: “The casual dining sector, for example, is facing pressure from quick-service brands offering new food choices, and newly-refurbished modern outlets.
“Consumers also have a bigger choice than ever of operators offering healthier and lighter eating. It is likely any new recession in foodservice will be harder to fight because the landscape is already intensely competitive.”
Lavenant outlined how eating-out visits started to slow after the Brexit referendum two years ago, and the consequences became clear in the second half of 2017 when the market began to lose visits after four years of growth.
He added: “This trend has accelerated since the start of 2018 and now is the right time to sound a warning. The foodservice industry has so far demonstrated remarkable resilience in the face of tougher operating conditions, cost pressures and the uncertainty caused by Brexit.
“But since the end of last year, we have seen some evidence of decline and operators will need to monitor carefully whether this downward trend continues. If it does, they will have to act fast to protect their business.”