Market Insight: CGA

Market insight: CGA

Taking a holistic view of the current out of home eating and drinking out market in Great Britain, one would be forgiven for suggesting that it is not as healthy as it once was. Indeed, CGA research with business leaders highlights that, as of August 2019, just 30% cited themselves as optimistic about the prospects of the market over the upcoming 12 months.

With high profile closures and CVAs, led by the likes of Jamie Oliver’s Jamie’s Italian, the casual dining sector in particular has taken the brunt of pessimism.

However, there remain bright spots in the industry and, even within the casual dining market, there are shoots of growth visible across high streets and city centres up and down the country. In fact, the like for like growth of managed restaurant chains, according to CGA’s Coffer Peach Business Tracker, stands at a healthy 1.9% - higher than the equivalent for pubs at 1.9%.

One such bright spot has undoubtedly been the explosion in the 'food-to-go' trend. Led by the need for convenience in increasingly hectic schedules, over half (59%) of all visits to the eating out market are to quick service restaurants, bakeries or coffee shops. It is little wonder that food-to-go has received so much attention and business leaders do not anticipate this slowing. Nearly half (45%) cited food-to-go as a growth area in 2019.

For consumers, convenience (51%) and location (52%) remain key drivers of visits and for those outlets that tailor their service and product offerings around these pillars, there are significant rewards. A customer driven by convenience is more likely to return than average, with outlets within the food-to-go market counting on more than one in five visitors (21%) visiting at least weekly, compared to 16% at the average outlet.

But the availability of healthy options is increasingly significant in decision-making, too, especially among visitors to London-based on-the-go brands like Itsu, Leon and Pret a Manger. What’s more, consumers are willing to pay a premium for healthy options. Across all food-to-go brands, the average spend is £5.38, but it is much higher at healthier brands like Itsu (£7.55) and Leon (£6.58). This healthy cohort has a higher average monthly spend on eating out as well, at £104 compared to the £92 average; proof this is a potentially lucrative market.

However, with this opportunity comes higher demands. There has been a significant increase in moderation and abstinence of both meat and dairy products, along with a shift towards more ethical lifestyles which are increasingly becoming as important as the core needs of convenience and location.

Along with increasing demands, opportunity also brings competition and the food-to-go market has seen no shortage of innovation and disruption in the past 12 months, exemplified by the new pizza by the slice concept ZA, from Pizza Express. If one of the most wellestablished operators in the out-of-home market is moving into a new space, there is evidently opportunity!

Sitting alongside food-to-go and presenting similar opportunities for suppliers, the surge in coffee shops has been hard to miss in the past decade as consumer tastes for high quality coffee increase. Indeed, 32.7 million of us have visited a coffee brand in the past six months and what is interesting is that it is clearly not just about coffee. In fact the importance of quality of drinks as a driver to coffee shops for consumers has decreased by 8% in the past three years, while the choice of food available has increased by 5%. In a convenience-driven market, speed of service and trust are now equally as important as drinks quality at coffee shops, highlighting the importance of an offer that resonates with consumers and is convenient across both food and drink.

It is evident that both the food-to-go and coffee markets offer opportunities, especially for the likes of baked goods, but this comes at a price. Consumers demand convenience yet health, well-being and ethical considerations are increasingly part of the decision process. However, an offer that marries these elements will tap into the undoubted opening that exists.

Charlie Mitchell, CGA

Charlie Mitchell Senior consumer research manager, CGA

CGA is the data and research consultancy of choice for the out-of-home food and drinks market, specialising in market measurement, consumer research and location planning.

An expert in consumer behaviour and trends in the out of home market, Charlie works within the growing consumer research division within CGA to develop narratives from all data sources available to provide one clear picture on relevant market topics.

CGA triangulates supply, demand and consumer data to give clients the expert insight needed to get them where they want to be, faster.