Following a difficult two years from the pandemic, the UK Eating Out sector continues to tackle challenges on several fronts including labour, the supply chain and not least of all, the rising cost of living. IGD CEO, Susan Barratt, considers the implications and the next steps for the UK Eating Out industry.

Consumers are facing the highest inflation seen for decades, with declining real wage growth and increasing energy and food bills. Rising costs are also impacting the eating out market and so far, there has been reluctance from operators to pass these on; businesses are worried about losing customers, but this has also reduced profits. Price increases now seem inevitable across all sectors, making eating out less affordable for consumers.

Our new forecasts for the UK Eating Out market consider recovery based on three scenarios for the future; the socio-economic landscape is currently just too unpredictable to land on one. That being said, we expect our low-mid growth forecasts to most likely play out, which indicate that the market will not return to its pre-pandemic state until at least 2024.

In this scenario, the eating out market recovery slows in 2022, reaching 79% of its pre-pandemic value. However, recovery does vary by sector and Quick Service Restaurants (QSR) is currently the driving force behind growth, offering a convenient, consistent, and value-driven alternative to eating at home. As workers start to return to offices, demand for eating out in town centres and transport hubs mostly recovers, but slowly as hybrid working is here to stay and these locations will continue to chase 2019 sales levels.

There’s no denying the industry is facing a challenging time and therefore planning, and prioritising must sit at the top of the agenda for businesses to navigate the year ahead and beyond. Priorities to plan for the future will vary by sector, but some key themes have emerged:

• Focus on experience: With consumers cutting back on spending, they will want to make the most of every eating out occasion, making the overall experience much more important
• Invest in technology where possible: Technology can eliminate manual tasks such as taking orders and automation of kitchen tasks can reduce labour costs and improve efficiencies
• Encourage frequent visits: Loyalty schemes provide a wealth of data which can be used to send personalised communications to consumers and incentivise repeat visits, crucial when consumers will be trying to reduce how often they eat out, as well as improving customer insight
• Prioritise an omnichannel strategy: Being able to reach consumers in a variety of ways and ensure a consistent experience will strengthen your brand

The team at IGD are holding an exclusive free webinar, Eating Out: a world of challenges and opportunities on Wednesday 11 May 2022, 11:00 BST, where you can hear direct from our experts with insight on the numbers, challenges and of course the opportunities by sector, I would encourage all interested journalists, manufacturers, wholesalers and operators to register here and discover more

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