Last week saw the IGD run their latest webinar on Eating Out: a world of challenges and opportunities. As ever, their insights presented by Rhian Thomas and Nicola Knight were well considered and highly relevant to us, a leading out of home agency, as we are always keen to stay ahead of market trends and consumer behaviour. The report was very comprehensive and certainly worth a read. But for those in a hurry, here are some key take outs:

Consumer Eating out of Home Insights

  • Unsurprisingly with the spiraling cost of living and war in Ukraine, consumer confidence is very low at -22. With confidence lowest in the 45–54-year-old age group due to their high level of financial responsibilities.
  • Consumers are focused on saving money over quality. 15% plan to eat out more than pre-covid, 28% plan to have more meals at home, 19% plan to have more takeaways and 45% plan to eat out less than pre-covid in a bid to save money.
  • Food to go is less impacted with only 30% planning to eat less than in pre-covid times with this falling under a ‘little affordable treat’ or lipstick effect as it is sometimes referred to.
  • Young and old have missed the social aspect of eating out the most. Whilst those with young children are more likely to socialise at home, choosing takeaways or cook at home delivery boxes, possibly to save money on babysitting or for ease.
  • Hygiene is still a real concern with 45% wanting reassurance when eating out with the oldest demographic most concerned.
  • Although consumers are tightening their belts, it seems special occasions are the one exception. Although 60% see rising costs of living impacting special occasions, 30% say they will do what they can to spend on occasions like birthdays and Christmas, with 40% saying they will save on day-to-day expenses to protect these occasions.
  • This however makes the eating out of home ‘experience’ crucial as consumers will expect something really special.

Eating out Market Insights

  • There are some serious headwinds hampering the post Covid recovery, specifically:
    • Inflation eroding the wealth of diners and employees
    • Regulatory change with National Food Strategy and border changes
    • Cost increases on ingredients and energy, likely to last some time
    • Staffing & pay as eating out businesses will need to raise pay to protect the spending power of workers
    • Productivity issues, as productivity will need to improve to keep businesses afloat
    • Cash-poor diners will impact eating out volumes and participation as consumers look for ways to save money
    • Depleted reserves, as we see a reduction in consumers’ pent-up savings driving them to look for value wherever they can. However, tech, healthy options, social surroundings, and convenience will also help to sway them, so it won’t be all about being the cheapest!
  • Recovery is happening but the headwinds are seeing predictions fall to the lowest forecast levels rather than those more optimistic figures you may have seen prior to the Ukraine war.
  • There will be sectors that will do better than others with QSR and restaurants recovering far quicker than hotels and leisure.
  • Bearing in mind that the market was valued at £52.6bn in 2019 pre-Covid, then dropped to £29bn in 2020, recovering to £36.2bn in 2021 and now up to £41.8bn in 2022 –20.5% on 2019 (based on sales of food and drink consumed with food including VAT).
  • The key growth trends driving eating out are predicted to be:
    • Perfecting the experience – as consumers want the best possible experience when they do decide to spend.
    • Right format, right place – maximising the operator space to align to customer needs and measuring success in £ per square meter.
    • Essential efficiency – using tech, menu engineering, staff training and every trick in the book to maximize ROI.
    • Closer to consumers – by really understanding consumer drivers, listening to customer feedback to take in key consumer needs such as sustainability, convenience, personalisation
    • Redefining value – by successfully balancing increase costs and price sensitive consumers to deliver value, drive loyalty (through apps etc,) and offer affordable treats and easy up-sells.
  • In essence, operators need to:
    • Stay informed
    • Maintain pandemic agility
    • Focus on productivity
    • Communicate with customers, staff and partners
    • Evaluate

In summary, eating out is in recovery but faces a lot of challenges. So, in order to thrive, it will have to once again be agile and adapt. Thank you to Rhian and Nicola for a highly informative session. For more information of IGD eating out insight visit