Analysts predict UK foodservice spend will be £400m more than expected this year

Retail destination

The NPD Group is forecasting that British out-of-home (OOH) foodservice visits will grow 1.6% in 2016 to 11.38 billion and a further 1.2% in 2017 to 11.52 billion.

NPD’s revised 1.6% forecast for 2016 is slightly higher than the 1.5% it predicted this time last year following the 1.3% actual growth in out-of-home foodservice visits in Britain in 2015. This is the second consecutive year that the sector has recorded a rise in visits.

The total spend in the British OOH market was £52.2 billion for the year ending December 2015. Following this strong performance, NPD has revised its 2016 spend forecast up from £53.1 billion to £53.5 billion, and says this will increase further to £54.7 billion in 2017. Its forecast for 2016 OOH visits is 11.4 billion, a 1.6% increase over the actual figure for 2015. For 2017, it sees 11.5 billion visits, a further small increase of 1.2%.

Cyril Lavenant, NPD’s director of foodservice for the UK, said: “It’s good to see that there was a bigger improvement in 2015 than anticipated, with the actual performance of 1.3% visit growth against our prediction of 1.1%. We are now forecasting 1.6% visit growth for 2016 due to increasingly confident consumers and a potential further boost from the UEFA EURO Championship and the Rio 2016 Olympic Games. However, while 2017 will also see growth, it is likely that the pace will slow down. We do not see consumers increasing their spending in the foodservice sector any faster than this.”

Casual Dining

Growth in the casual dining sector is strong with NPD predicting that it will take another year before it breaks through the £5 billion mark. Last year it predicted this would happen by the end of 2016, but with actual spend only reaching £4.7billion in 2015, NPD now believes this will happen more slowly, growing 5% to £4.9 billion in 2016 and a further 4.5% in 2017 to reach £5.1 billion.

According to NPD, the slower rate of spend growth is due to casual dining having reached saturation point in the London market. The capital accounts for 20% of overall British foodservice industry spend and casual dining is a major channel within that. Recognizing the issue of London’s market saturation, casual dining operators have started to export their concept outside the M25.

QS Burger

NPD forecast last year that the QSR Burger segment would notch up 1.0 billion visits in 2015 and 1.03 billion in 2016. It also predicted £4.1 billion sales in 2015 and £4.3 billion in 2016. The actual 2015 performance was very close to this with visits for 2015 reaching 1.01 billion and sales reaching £4.2billion. NPD has now revised its 2016 visits forecast upwards to 1.05 billion, or 4% above the actual performance in 2015. It is tipping 1.09 billion visits for 2017, which would be a 3.8% increase over 2016.

For spend, NPD has a revised 2016 forecast of £4.4 billion in 2016, a 4.8% jump above the 2015 actual figure, and £4.6 billion for 2017, a further 4.7% increase. This positive trend and the upward revision of the forecast are a result of the sector’s continuous investment to increase the overall restaurant experience as well the quality of the food.

QS Coffee

NPD’s forecasts for QSR Coffee reflected the actual figures. It predicted 636 million visits for 2015 and this matched the actual figure for the year exactly. Its forecast on spend was also accurate, with the actual figure coming in at £2.17 billion, slightly above its £2.16 billion forecast. Its revised 2016 visits forecast is 656 million, or 3.1% over the 2015 actual figure, and NPD sees a further jump in visits in 2017 to 673 million, which would be 2.7% over the 2016 figure.

This trend underlines the increasing fondness of British consumers for specialty coffee and their growing willingness to treat themselves throughout the day. NPD has also revised its QSR Coffee spend upwards to £2.3 billion, a 4.5% increase over the 2015 actual figure. It also forecasts sales of £2.4 billion in 2017, which would be 4.1% above 2016.

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