Growth in future restaurant spend exposes cost burden facing kitchens

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British foodservice industry visits are poised to fall over the next two years but spend will increase to a record £60 billion – purely because operators will be forced to increase menu prices.

Research firm NPD Group thinks that visits in the British out-of-home (OOH) or eat-out foodservice market will slide in 2019 and 2020 after peaking at 11.35 billion visits in 2017. Last year they dropped – 0.5% to 11.29 billion.

While the company forecasts a further drop of -0.5% in 2019 and another -0.1% in 2020, it calculates that overall spend will soar 5% to £59.47 billion by end of 2020. That equates to almost £3 billion more than last year, but it largely tells a story of the rising costs facing operators as much as anything else.

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NPD says the increase will be “mainly” driven by operators increasing menu prices as they respond to cost pressures, including inflation.

The average individual cheque reached £5.00 in 2018 and will rise an additional 5.6% by 2020 to £5.30, it said.

A key trend in British foodservice is the decline of the on-premise sector (food and drinks consumed where purchased) versus off-premise (delivery, takeaway / grab ‘n’ go and drive-thru).

This is the result of the long-term decline in retail footfall as more shoppers purchase online. The on-premise market peaked at 4.58 billion visits in 2016 but dropped in the two years following.

It will lose a further 8% by end 2020 (vs. 2018) to reach 4.02 billion visits, NPD said. On-premise spend will increase marginally – but mainly as a result of operators increasing menu prices.

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Andrew Seymour

The author Andrew Seymour

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