• The UK Eating Out sector is expected to reach 79% of its pre-pandemic value in 2022
• Consumer behaviour and socioeconomic factors are slowing recovery and driving disparity
• QSR is the driving force behind market growth
• Restaurants and Pubs will continue to recover but pace will slow
• Focus on customer experience, investment in technology and mitigating costs will support recovery

In brand new forecasts* and in-depth analysis for the eating out sector, IGD – leading providers of insight and foresight for the food and consumer goods industry – highlights the road to recovery and its complexities, driven by evolving consumer behaviour and socioeconomic factors.

Modelled on three different economic scenarios to reflect current global volatility, the forecasts give manufacturers, wholesalers and operators a view of the challenges ahead and actionable insights to help with planning for both short-term and longer-term recovery.

Nicola Knight, Senior analyst and lead on the new forecasts and report comments: “During the pandemic, we saw an unprecedented and accelerated level of diversification and innovation in the sector that enabled survival for some businesses. As the market recovers from the shockwaves of the last two years, there are a new set of challenges to face, such as the rising cost of living and inflation, and now, the significant implications of the war in Ukraine.”

“Recovery will be at a slower pace than industry would have hoped. Our low-mid growth forecasts are most likely to play out, meaning that the market will not return to its pre-pandemic state until at least 2024.”

“Recovery will also vary by sector and QSR is currently the driving force behind growth, offering a convenient, consistent and value-driven alternative to eating at home, providing the “lipstick effect” for consumers. That said, city-centre and transport hub focused brands will continue to chase 2019 sales levels.”

The report examines the key challenges facing each sector:

• Pubs and Restaurants will see recovery slow; mid-market operators will be squeezed as consumers eat out less or down-trade, yet high-end restaurants will be protected to an extent.
• Hotels and Leisure will find recovery the most challenging as discretionary spend is scaled back by more consumers. Staycations will continue at higher than pre-pandemic levels due to pre-booking but international tourism will still be considerably reduced. Income from domestic and international business travellers will remain significantly depressed this year.
• Staff Catering will see some growth prompted by returning office workers. However, some businesses have removed facilities or remodelled to lower cost formats. With businesses facing increased costs there will be little desire to re-invest in the short-term.
• Healthcare, Education and Government-run Services are likely to revert to pre-pandemic patterns with inflation driving growth.

Nicola continues: “There’s no denying, the industry is facing a challenging time; planning and prioritising must sit at the top of the agenda for businesses to navigate the year ahead and beyond. Priorities will vary by sector, but there are clear behaviour themes driving the industry forward which include an enhanced focus on customer experience and loyalty, investment in technology and implementing strategies to mitigate costs.”

For more insight on the numbers and the challenges and opportunities by sector, IGD invites journalists, manufacturers, wholesalers and operators to attend an exclusive free webinar: Eating out: a new world of challenges and opportunities, Wednesday 11 May 2022, 11:00 BST. Free registration here

ENDS

For media enquiries please contact Charlotte Jackson [email protected] / [email protected]

Notes to editors

IGD’s UK Eating Out Market Forecasts are based upon Peter Backman’s Foodservice Market Structure and Trends data which it acquired in 2021. IGD has overlayed its renowned scenario-based forecasting methodology onto the dataset, providing the sector with a practical yet flexible view of the future to aid business planning processes at a time of great uncertainty.

IGD is an organisation of two interconnected communities. The profits from Commercial Insight are reinvested into Social Impact, which together work to drive change that makes a tangible difference for society, business and the individual.

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