Navigating 2026: Lumina Intelligence Q4 Food Strategy Forum

Each quarter, Lumina Intelligence hosts the most insightful, deep dive into the hospitality sector, helping us prepare for the months ahead. In the wake of the budget, it was the perfect time to see what we have in store for 2026.

Challenges:

The Budget:

The decisions in a nutshell:

The promised 75% business rates relief was lowered to just 25%.
National minimum wage rises +6.7% to £12.21 from April 2026, which is likely to cause a ripple effect. As when minimum wage rises it has a knock-on effect on salary expectations across the board.
The addition of day-one rights for sick pay and parental leave, frozen income tax thresholds until 2028-2029 and potential visitor tax in major cities.

The cost pressures extend beyond payroll, as food inflation has pushed some items up 20%. The challenge is balancing cost-cutting with customer experience with 91% of operators describing the current trading conditions as ‘challenging’.

Consumer Behaviour:

Despite the changes in the budget, consumers haven’t entirely retreated…

Penetration in the eating out market has climbed since 2023, with more people visiting more frequently.
Spring and summer 2025 saw penetration peak, helped by good weather and outdoor dining.
Whilst Black Friday 2025 saw a 7.2% drop in visitors to UK shopping destinations compared to the previous year.

Eating Out:

In the world of service-led restaurants, while we saw five outlets close every week in 2025, the rate of decline is slowing (down from 5% to 4.1%). In fact, penetration is up nearly one percentage point, with over one in ten UK adults having a restaurant occasion each week, paired with a forecast growth of 0.8% reaching £19 billion. We may still be behind pre-COVID levels of £19.3 billion, but we’re certainly making progress!

Trends:

Bidfood highlighted ‘tops and loaded’ – noting that loaded hash browns, loaded dumplings and loaded fries are strong margin and value drivers.
With the 2026 football World Cup, operators must think tactically about timings – it could mean big breakfasts or afternoon snacks, as well as dinner and drinks occasions. Operators can cash in on these occasions by making it easier for consumers to order drinks in advance for half time or concoct innovative cocktails in team colours to tap into team spirit.
Competitive socialising is showing no signs of slowing down.
The effect of weight loss medication (Ozempic, Wegovy, Mounjaro) also needs to be taken into account as users experience a reduced appetite. With 8% of UK adults currently taking these medications and with predictions to rise to 20% once formats change from injections to pills, now is the time for operators to shift their portion sizes and strategies.

Demographics:

Lumina noted that 25 to 34-year-olds are driving growth, accounting for nearly one in three restaurant visits. This age group are those honing their careers, earning well, and less likely to have to provide for a family – the epitome of living young, wild and free!

Meanwhile, 18 to 24-year-olds are experiencing a rise in unemployment so taking it easy when it comes to eating out – however, this group remains crucial for long-term growth, driving expansion in quick service restaurants, pubs and bars.

Drinks:

For the past few years, the narrative has been that Gen Z doesn’t drink, however 2025 proved this to be false. 78% of 18 to 24-year-olds drink alcohol, and there’s been a reduction of those who never drink.
Cocktails are a key menu item, accounting for over 20% of all alcohol occasions in restaurants, up nearly two percentage points year on year. This has been driven by 18 to 34-year-olds, as cocktails are involved in a third of their drinking occasions.
Quality comes first. Consumers favour smaller serves, done well and at a reasonable price, such as smaller serve martinis priced between £5-£8 rather than supersized sugary drinks.

Three Strategic Pillars for Success

1. Diversification
Testing multiple formats such as drive-throughs, direct-to-consumer, meal kits, and alternative streams of revenue can benefit your business in months to come.

2. Purposeful Brand Identity
70% of restaurant consumers are increasingly brand-conscious, up 3.3 percentage points year on year. With Leon reappointing its founder to restore its “naturally fast food” mission and clear brand identity. As authentic brand positioning separates winners from casualties.

3. Strategic Partnerships
Joe & The Juice’s collaboration with Bentley Motors created a coffee-meets-luxury experience now touring globally through 2026. As cross-sector partnerships drive cultural relevance and help brands reach new audiences.

Menu Trends: Quality, Health, Adventure

34% of restaurant consumers describe themselves as very health-led, up six percentage points year on year.
We’re seeing a return to elevated classics executed exceptionally well.
The “fewer, but better” approach reflects consumer fatigue with overwhelming choice, whilst managing costs – one thing done exceptionally well.
Consumers would pay more for higher-quality ingredients, such as fresh, seasonal foods or minimally processed options.
Cuisines:
– Korean cuisine is moving beyond fried chicken into bulgogi and bibimbap.
– Malaysian food is emerging.
– South American cuisines (Venezuelan, Peruvian, Colombian) are gaining traction.
Sweet Treats:
– Iced tea is experiencing an innovation explosion.
– Basque cheesecake, Korean desserts and jiggly soufflé cakes are trending.
– Global flavours and Instagrammable options will always come out on top.

Summary

The UK eating out market was forecast to see a net gain of 22 outlets per week by end of 2025, led by contemporary fast-food brands. Revenue growth is steady but unremarkable at 2.4% per year from 2026 to 2028.
Inflation should ease to 2.0% by 2027.
Unemployment will rise slightly before declining by 2027.

The road ahead is bumpy but manoeuvrable for operators who embrace technology, build purposeful brands (check out our blog on current restaurant branding here), diversify channels and focus relentlessly on quality and experience.

We want to thank Lumina Intelligence for their insightful deep dive as we look forward to the year ahead and the challenges it brings. To stay up to date with everything at jellybean, you can follow us on Instagram @jellybeanagency.