The insight expert’s research showed the overall UK eating-out market is set to reach a value of £95.2bn in 2022 – a rise of 4% versus its 2019 value – but the prediction means inflation is outpacing market growth.
With a value of £68.7bn, pubs, hotels and restaurants represent the largest segment of the UK eating-out market but are the forecast of a slower recovery is coupled with continued outlet decline and dampened consumer confidence impacting footfall in the segment.
The retail, travel and leisure sectors are set to be the best performing segment of the total market, with growth up 9.1% against its 2019 value.
There has been two percentage-point (pp) increase in consumers being price-led, amid decade-high inflation and the rising cost of living in the UK. Some 72% of consumers align with price-led values, meaning that operators across the market will need to emphasise value for money credentials through promotions, loyalty schemes and good-quality products and services.
The proportion of consumers eating out has seen a boost of 23% and visit frequency has increased by 15% over the 12 weeks ending 15/05/22, compared to the same period last year when dine-in was restricted to outdoor-only. Average spend has grown by 12%, compared to last May period when occasions heavily relied on delivery and quick service channels.
Occasions that include both food and drink have dominated the eating/drinking-out market in the 12-week period ending 15/05/22, up by 1pp v the 12-week period ending 20/02/22. Drink-only occasions have also increased in the period by 0.6pps, showcasing the opportunity for operators to offer a greater range of meal deal pairings, including drinks to prompt consumers to purchase food alongside a drink.
Over the same period, alcoholic drinks are increasing share of occasions by 1pp, driven by sporting events and consumers opting for more pub visits. Beer consumption has increased by 2pps, driven by the warmer weather and sporting events.
Reality won’t live up to expectations
The eating-out market is forecast to reach a total of £102.8bn in 2025, representing a compound annual growth rate (CAGR) of 2.6% in the forecasted period between 2022 and 2025.
Lumina Intelligence senior insight manager Katie Prowse said: “Operators across the UK eating-out market will be buoyed by the end of the pandemic and the impact of a year’s trading without restrictions. However, the reality will not live up to expectations, as operators face rising costs, staff shortages and squeezed household incomes.
“We are already seeing the impact of these in the data, with spend growth and penetration both slowing. Operators face a significant challenge managing costs, as well as attracting footfall.”
Find out more about Lumina Intelligence’s UK Eating Out Market Report 2022 here.