It’s fair to say, that as the leading foodservice agency, eating out is pretty much always top of mind for us, so it was fitting that last Thursday morning saw us heading along to the MCA’s Eating Out ‘Top of Mind’ briefing, where they showcased their decision makers’ survey along with consumer insight, 2017 forecasts and concepts to watch out for. As ever the morning managed to cram in a huge amount of information and insight, but here are my top five take-outs.
1. The UK eating out market is estimated to reach a value of £87.6bn in 2017, with an expected market slow down from 2.0% growth in 2016 to 1.7% in 2017 in line with inflation (so basically static). Growth in the eating out market will be affected by slower economic growth, reduced domestic demand, rising input costs, increasing inflation and weakened consumer confidence. Physical expansion is expected to be sluggish at 0.3% with more of a focus on driving spend through like-for-likes and clever price architecture management. Overall there is hope that the market will be resilient with those best placed for success likely to be operators focused on convenient, low ticket channels offering high quality products.
2. Top of Mind Survey – Comparing the findings from 2016 to 2017, top decision makers agree the following will continue to be important to business growth over the coming year: contemporary fast food & street food, millennials, healthy eating, recruiting and retaining quality staff and excellent customer service. While industry leaders no longer think the following: that trading will remain unchanged (unsurprisingly), that the National Living Wage will have a positive net impact or that consumer eating out frequency will continue to increase over the next five years. Overall the outlook for 2017 was considered to be “more challenging, costlier and competitive, but equally faster, healthier and still very good in parts!”
3. With regard to the eating out market metrics, participation is stable, but has begun to fall following a period of growth, increasing average spend across all day parts has been driven primarily by inflation, frequency has increased (mainly driven by 25-34 year old demographic, with no increase from 18-24 year olds) but has seen a drop in the second half of 2016 and finally coffee shops/cafes, pubs and supermarket on the go offers are currently driving growth in the market.
4. Looking ahead to the rest of 2017, it is expected to be a tougher year with consumers cutting back on higher spend discretionary visits, spend is likely to rise, but mainly due to price inflation, dinner will be hardest hit, breakfast may also take a hit, as well as snacking, but lunch trade and low ticket convenience-led channels are predicted to remain robust, as the least likely to be cut from consumer spending. The silver bullet for success in 2017 – meet the consumers need for convenience, quality and value for money!
5. Outlet growth is slowing down from 6.5% in 2015 and 3.9% in 2016 to approx. 3.7% in 2017. Net growth is still resilient with around 10 opening per week, but this is down from 16 per week in 2015. London will be the battleground for some tough competition, as property costs ramp up, making regional expansion far more attractive. Italian leads the race in net new openings (making up 1 in 10 of the new openings this year) with South East Asian set to be the fastest growing cuisine in 2017.
The session culminated in the launch of MCA’s new Menu Tracker with a demo and Q&A session which proved very informative. A very interesting morning from Simon and the team at MCA, we look forward to the Food To Go conference next week!