The Lumina Intelligence UK Eating Out Market Report has found the sector will be worth a total value of £101bn in 2025 but highlighted a widening gap in spending power among different income brackets.
It said pubs and service-led restaurants were the most exposed to rising staff costs, business rates and volatile inflation, and predicted they were likely to see a decline in outlet numbers.
Market growth was forecast to be driven by retail, travel and leisure, and contract catering segments. Travel was forecast to be the best-performing segment led by stronger air and rail passenger numbers.
It also said many pub operators are focusing on enhancing and revamping existing spaces to maximise revenue through utilisation of space, catering to modern consumer demands and an array of different mission types.
Consumer habits
The report also found value for money, quality and health are notable consumer attitudes, driving decision making and increasingly choice of venue.
It said all channels benefited from an increase in consumer numbers over the past two years, with the strongest growth being from quick service retail and pubs and bars, up 1.4 percentage points (ppts).
Pubs and bars gained the largest amount of occasion share, up 1ppts year-on-year. This is in line with a return of ‘after-work drinks’, linked to increased office presence and city centre footfall in the capital, the report said.
Consumers are increasingly visiting pubs and bars for its core occasions; drink only and dinner. The research said the customer experience was increasingly important in pubs, with consumers considering the speed of service and ease of payments.
Drink occasions
Drink occasions have benefited from a growing number of consumers and frequency across alcoholic and non-alcoholic drinks.
A small shift away from no alcohol and towards less alcohol, alongside increased presence in pubs and bars, has benefited alcohol occasions, the research found.
Cocktails have gained the largest share of alcohol occasions, indicating a willingness for consumers to trade up to the more expensive drink type.
The top growing reasons for drinking cocktails are ‘it went well with the food’ and ‘it was recommended by the staff’.
The report also predicted that stronger tourism and demand for high quality and premium food and beverage will be key levers of growth for operators in the next three years.
For more details on the report, click here.
