Promising growth areas expected in the UK Foodservice sector

Food Service Sector’s Promising Growth Areas in UK: Projections for the Next 2 Years, with a Focus on City Centres

The Food Service Industry in the United Kingdom is one of the sectors most severely affected by the Covid-19 pandemic. As per numerous reports, including the London Tube and the Centre for Cities, by the beginning of 2023, the market had not yet reached pre-pandemic levels. However, the trend looking ahead is highly optimistic.

According to Consumer Traffic Intelligence from Meaningful Vision, foodservice traffic in the top 100 foodservice chains, including fast food, restaurants, and pubs, grew at a double-digit rate (+22%) in 2022. The Meaningful Vision restaurants analytics shows that the traffic continued to grow in the first quarter of 2023, with a 5% increase compared to the first quarter of 2022.  Moreover, cities with a population of over 100,000 experienced a growth rate of 12%, while major city centres saw an even higher growth rate of 23%.

What is driving this trend in the foodservice industry?
One of the factors contributing to the increased visits is the return of employees to offices after remote working. The growth in business activity in major cities and city centres specifically stimulates traffic to foodservice outlets. For example, a 23% growth rate may indicate an increase in the average number of days working in the office, from 2 to 2.5 days; only a few extra hours working from the office has a remarkable impact! Since most people still follow a hybrid work gradually returning to offices, traffic growth in these areas is slower compared to residential areas, where it has already almost recovered.

How long will this growth last? 
Many companies are not planning to return to pre-pandemic work formats fully yet. However, city centres still have significant growth potential. Our research demonstrates that foot traffic in city centre locations is two to three times higher than in other areas. The two years of the pandemic have significantly reshaped the market, with small restaurants and cafes being forced to close and major players reducing their presence in unprofitable areas and formats. New players are filling these vacant spaces, and central locations are attracting people and businesses again.  Choosing a promising and favourable location ahead of competitors is a challenge for many restaurant operators. At Meaningful Vision, we forecast the growth to continue over the next two years, and this period may be a critical one, witnessing the emergence of a new market landscape and power distribution among the market players.

Which formats are growing fastest? 
All formats are showing a double-digit growth: 

  • Burger chains are growing the most at nearly 40%
  • Followed closely by casual dining (+37%) and pubs (+30%)
  • While coffee shops are growing at 22%

Centres in cities are consumer attractions and historically have a different market structure.  They primarily serve as places for breakfast and lunch. Studying visitor distribution throughout the day, lunchtime is the peak period in central locations, accounting for over half of the total traffic, and this share is growing. Currently, this demand is met by coffee shops and bakeries, which account for 43% of the traffic in the first quarter of 2023 according to Meaningful Vision’s data.

The post-Covid world has changed significantly, including consumers’ sentiments and behaviour. People now value life, social interaction, and freedom more. These social changes can be studied and tracked through our research data. If we look at the distribution of traffic by days of the week, we see a noticeable increase in the share of weekends.  During weekends, other formats, especially restaurants and pubs, experience growth.

The centres of major cities remain crucial areas for the food service industry. Determine the growth of visits in these locations, see how your business is changing relative to competitors, and pinpoint main areas of expansion using Consumer Traffic Intelligence from Meaningful Vision.

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