As the leading foodservice agency, we had the pleasure of attending the 2017 Eating Out Market Data Briefing at the prestigious M by Montcalm in Shoreditch. These MCA events provide a wealth of insightful information about the foodservice industry, such as market forecasts, menu analysis, consumer activity and current trends. It’s a great way to stay on top of what’s going on in the market – which is why Jellybean is always there.
The MCA team covered so much data throughout the morning, you really had to be there, but here are my main take-outs.
The general outlook
Although the number of UK adults eating out is at a three-year high (94.4%) and the average spend per head per visit is also up YOY (+7% for dinner and snacking), the frequency at which UK adults eat out is declining. With this in mind, MCA have reported a subdued growth in the market with turnover forecast to grow by 1.7% to £87.9bn in 2017, down from 2.0% in 2016 and a peak of 2.8% in 2015.
There are many contributing factors for this slower pace of growth, including rising ingredient and staffing costs to operators driving menu price inflation, declining consumer visit frequencies and low investment levels due to weaker business confidence.
Investing in experiences will become increasingly key as costs prevent many operators from physical expansion. MCA believe concepts delivering an affordable, convenient yet rewarding experience are best placed to succeed in the current market and fast food, selected branded restaurants, c-stores and managed pubs are all well-placed to continue to grow this year and over the next three years, as are operators in travel sites.
Growing menu prices
One of the factors leading to an increase in average spend per head, is of course and increase in menu prices. Using the recently launched MCA Menu Tracker, research into menu price increases on same-line dishes has taken place. When looking at the top 20 Eating Out brands, 13 of them have seen YOY menu price increases to 90% or more of their same-line dishes. Overall there is a c3% increase in menu prices this year, with entry prices across all operators showing the biggest movement; 3.2% up on Starters, 3.9% up on Mains, 5.1% up on Sides and 6.6% up on Desserts.
Analysis around regional price differences was also carried out using the MCA Menu Tracker. Results indicate a gradual growth in the number of operators using differential pricing in London, from 59% in 2016 to 62% in 2017. Regional price differences range between £0.55 and £1.33 across brands, with Wetherspoon showing the biggest variance in same-line dish prices.
The fall in frequency of adults in the UK eating out is being offset by rising average spend and stable participation levels. So when consumers do go out, what is hitting the spot? The channels showing the biggest growth in share of eating out visits YOY are Pub Restaurants (13.1% up to 14%) and Independent Restaurants (8.9% up to 10%). The channel showing the biggest loss in visits is Fast Food (15.4% down to 14.6%).
Pub and independent restaurants go on to score consistently above average on key performance indicators such as food quality, freshness, value for money, menu choices, experience and cleanliness, as well as above average when scoring the likelihood to revisit and recommend. Fast Food scores consistently below average on the same KPIs, with the exception of low prices and family friendly.
Staying in is the new going out
Over half of takeaway delivery users were acquired in the past five years and the market is now estimated at £7.1bn. Operations are evolving, it’s not just online ordering software now, it’s delivery logistics coupled with the software, often with the added benefit of a dedicated catering kitchen to fulfil orders quickly and efficiently.
Unsurprisingly, the most valuable customers in this market are the 18-34 year olds, making up 47% of the £7.1bn annual spend (compared to 23% through +50year olds). Aside from fancying a ‘treat’ (49%), the biggest motivations for order delivered takeaway are being too tired to cook (29%), or laziness (22%). And it is set to grow even more, with 61% of regular users saying that they expect to order more delivery than they currently do in the next 2 – 3 years.
As usual, the debrief was not only informative but delivered brilliantly by the MCA team. With so many developments in the market, there are endless opportunities for brands and operators which is why Jellybean love to get involved in building strategic campaigns for our clients. To find out more about MCA Insight and how you can get the full report visit the MCA website here.