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UK eating-out market set to value £95.2 billion in 2022 +4% versus 2019

Published:  22 June, 2022

According to the new Lumina Intelligence Eating Out Market Report, the UK on-trade is set to value £95.2 billion in 2022, +4% versus its 2019 value, meaning that inflation is outpacing market growth.

At a value of £68.7bn, hotels, pubs, and restaurants is the largest segment of the UK eating-out market but is also set to see the slowest recovery, with continued outlet decline and dampened consumer confidence impacting footfall in the sector.

The proportion of consumers eating out has seen a boost of +23%, and visit frequency has increased by +15% over the 12 weeks ending 15/05/22, compared to the same period last year when dine-in was restricted to outdoor-only. In addition, average spending has grown by +12%, compared to last May, when occasions heavily relied on delivery and quick service channels.

However, these increases have been modest between December 2021 and May 2022. Penetration rose by +3%, visit frequency remained flat at 1.5 times per week, and spending grew just +2% to £10.79 per visit.

Lunch occasions have seen the most considerable increase in day-part share in 12WE 15/05/22, compared to the same period last year (+3.3ppts). However, this growth has been at the expense of dinner occasions which have declined by -4.4ppts, as consumers opted for daytime events, including lunch, snack and drink-only occasions. This is driven by more workers back in offices and seeking quick, affordable and on-the-go solutions.

Occasions that include food and drink have dominated the eating/drinking out market in 12WE 15/05/22, up by +1ppt versus 12WE 20/02/22. Drink-only events have also increased by +0.6ppts, showcasing the opportunity for operators to offer a greater range of meal deal pairings, including drinks to prompt consumers to purchase food alongside a drink.

Over the same period, alcoholic drinks are increasing the share of occasions by +1ppt, driven by sporting events and consumers opting for more pub visits. Beer consumption has risen by +2ppts, caused by the warmer weather and sporting events. San Miguel has grown its share by +2ppts, with consumers opting for more premium beers, highlighting an opportunity to drive spending through premium occasions.

The eating out market is forecast to total £102.8 billion in 2025, representing a compound annual growth rate (CAGR) of +2.6% from 2022F-2025F.

Inflation is forecast to sit between 2.5% and 2.0% from 2023-2025, meaning there will be little volume growth in the market by 2025.

There is a £5.7bn size of the prize for the top 10 sub-channels from 2022F-2025F. Managed, branded, and franchised pubs are set to lead in absolute value growth.

Commenting on the findings, senior insight manager at Lumina Intelligence, Katie Prowse, said: “Operators across the UK eating out market will be buoyed by the end of the pandemic and the impact of a year’s trading without restrictions. However, the reality will not meet expectations, as operators face rising costs, staff shortages and squeezed household incomes. We already see these impacts in the data, with spending growth and penetration both slowing. As a result, operators face a significant challenge managing costs and attracting footfall.”

This £5.7bn opportunity between 2022-25 shows the size of the prize for brands. Delivery, premiumisation, and digitisation are key trends shaping the future of eating and drinking out. 

Find out more about Lumina Intelligence’s UK Eating Out Market Report 2022 here.