Thursday, 29 July 2010

Eating out report warns of long term effect of recession

The UK eating-out market is starting to see green shoots of recovery, but while the amount spent on dining out of the home in 2010 is marginally up from last year the recession will have an enduring impact on consumer attitudes, according to new research.

The report, Eating Out in the UK 2010, produced by industry analysts Allegra Strategies, revealed the value of eating out would rise 1% from last year to £40.5b in 2010, with one in 10 meals eaten away from the home, down from one in nine in 2009.

The findings come in an extensive piece of research into the size of the UK informal eating-out market, which includes pubs, fast-food restaurants, staff restaurants and coffee shops.

The report, which tracked the eating habits of more than 2,000 consumers, found that there had been a decline in visits to outlets typically charging more than £10 per head, while outlets charging less than £10 have seen the strongest increase in trade. Moreover, discounting has become a permanent feature of the market, with nearly four in 10 adults using vouchers on a regular basis.

Eating Out in the UK 2010 predicted that growth would continue over the next five years, with the market hitting £49b in 2015. However, it warned that the market would be affected in 2011 by the outcome of the emergency budget and the rise in VAT to 20%.

The report also found a major trend towards healthier eating, sustainability and food provenance. It said that half of consumers claimed that healthier eating now formed part of their overall eating-out behaviour and said that local sourcing was the most important sustainability initiative for operators to engage in.

Steve Gotham, project director, Allegra Strategies, said the evidence of the market recovery after a difficult 2009 was encouraging. "However, with trading conditions set to be impacted by continuing economic uncertainty and the VAT rise to 20% in 2011, which will only serve to widen the price gap between the cost of eating in versus going out, short-term market prospects are set to remain challenging," he said.

"Foremost among customers' emerging needs are healthier eating and greater sustainability responsiveness from operators. Consumer awareness and knowledge of healthier eating and sustainability issues continues to grow - and more engagement in both of these areas from eating out businesses will be essential to strengthen customer affinity."

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