UK eating out sector faces 'turbulent and tremendous' year

According to the latest research from Allegra Foodservice,  the UK out-of-home market grew 2.7 per cent in value terms last quarter, with participation up 4 per cent and the average number of meals eaten out per month reaching 9.2.

Allegra said most of the growth was driven by breakfast and lunch, which are increasing their share of the overall market.

Horizon’s latest Eating Out-Look survey also pointed to an increase in eating out frequency at the end of last year, with the regions showing strong growth for the first time during the two weeks over Christmas.

According to the survey, people ate out an average of 1.94 times over the Christmas 2014 period, up from 1.8 times a year ago. There was particular growth in the North and the East, where people ate out more frequently than respondents in London. Wales also saw a big hike, with eating out frequency reaching the same level as the capital.

“Our results also show that recovery is beginning to happen regionally, with diners in Wales, the North and the East dining out more often,” said Emma Read, Horizons’ director of marketing & business development.

“This is good news for the hospitality sector and means that consumers across Britain are feeling more confident in the economy.”

Value challenge​

However, while the Horizons report showed growth in average spend over the Christmas period - up to £14.48, up from  £14.41 last year - Allegra's data revealed that average spend per visit dropped 13 per cent in Q4 to £9.25.

"Average spend per visit levels were impacted by the combination of weak underlying consumer confidence, significant promotional activity during this crucial trading period and by the visit share gains made by pubs and fast food operators," Steve Gotham, Allegra's director of insight, told BigHospitality.

Looking to 2015, Allegra predicts the eating out market will grow a further 2.9 per cent, but it will be a ‘turbulent, tricky and tremendous’ year for the sector. 

Value is expected to be a ‘mega trend’ this year, and Allegra executive director Simon Stenning told BigHospitality's sister publication M&C Report that ‘discount driven consumers’ will continue to pose a challenge to the mid-market.

“The value operators will continue doing well. Wetherspoon’s is a great example of this. Forget what the city says about margin. They are delivering great value and customers are flocking to them,” he said.

“But at the same time you have operators flourishing at the other end of the spectrum where customers have no problem with paying £50 for lunch. It’s the operators caught in the middle that have the problems.”