Spend and penetration flat in eating-out market

By Gary Lloyd

- Last updated on GMT

Sector issues: the rising cost of living is affecting out-of-home eating (credit: Getty/SolStock)
Sector issues: the rising cost of living is affecting out-of-home eating (credit: Getty/SolStock)

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Customer spending and penetration in the hospitality sector is flat, according to the latest data from Lumina Intelligence Eating & Drinking Out Panel.

The data, aggregated in the 12 weeks ending 12/06/2022, showed penetration (the measure of how much a product or service is being used by customers compared to the total estimated market for that product or service) has increased just 2ppts (percentage points) and has more recently been unable to match highs seen across April 2022, falling to 56% in the week to 12 June.

In the same period, average spend has increased just 2%, despite high levels of inflation and opportunities for growth including the Jubilee weekend and warmer weather.

Dinner occasions declined

Purchasing lunch and snacks out of home has increased 1.4ppts and 1ppt, respectively, as more workers return to offices and purchase meals on the go. Dinner occasions have seen a decline in popularity, with the day-part share of dinner visits declining 1.6ppts despite an increase in average spend. There has been a 7% decline in spending on the snacking day part, signifying consumers are reducing spend on less necessary items.

Across all day parts, there has been a reduction in the number of under 18 to 34-year-olds eating out in the past quarter. The cost-of-living crisis is affecting this age group, the most lucrative category for eating and drinking out. The proportion of those aged 55 and above eating out is increasing, which presents an opportunity to cater more for the needs of this demographic.

More expensive channels suffering

The 18 to 24-year-old category are turning to cheaper options such as QSR (quick service restaurants), with this channel seeing the proportion of 18 to 24-year-olds visiting in the past 12 weeks increasing by 3ppts. There have been reductions in young people choosing to eat at restaurants, demonstrating a need for this more expensive channel to respond with initiatives such as promotions or voucher schemes to boost appeal to younger consumers.

Lumina Intelligence senior insight manager Katie Prowse said: “The rising cost of living continues to bite consumers and have a knock-on effect on eating and drinking-out behaviour. Despite the extra bank holiday and the Queen’s Jubilee celebrations, spend and penetration remained flat. Consumers are cutting back on discretionary spending, which is evident by the decline in the treat mission, which dropped across lunch, dinner and snack, by 1ppt, 3ppts and 2pts, respectively during the past quarter.”

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