Total UK food and

Total UK food and drink market declines in real terms in 2022

The total food and drink market across eating in and out is forecast to finish this year at +6.6% versus 2021, with further growth for 2023 of +5%, according to new forecasts from IGD’s Eating In Vs. Eating Out Report.

However, when inflationary price increases are stripped out, the picture is very different – citing a 2% decline this year versus 2021, say IGD. Highlights from their report include that this year eating in (retail) will account for 71% of the market with eating out (foodservice) at 29%. This is a recovery for eating out from the 21% share in 2020 but still some way below its prepandemic share of 37%, say IGD.

Retail channels will start to steal share of stomach from foodservice in 2023, they predict, however retail wins from foodservice will be mostly offset by down-trading by shoppers – cheaper products, buying less and switching to own label. Growth will be driven by inflation with real market value set to decline in 2022 versus 2021.

Nicola Knight, insight manager and eating out sector expert at IGD, said: “In 2020 lockdowns forced a strong switch from eating out to eating in, with 2021 showing a gradual return as venues opened and consumer confidence and appetite for going out increased. However, from Q4 2022 and into 2023 there will be a halt to this trend as retail channels start to steal share of stomach from foodservice, reflecting the challenging economic landscape.”

Retail has already been experiencing the impact of the increased cost of living on shoppers, add the researchers. In real terms, the UK retail market for food and drink will shrink in 2022 and fall slightly in 2023. Consumers are expected to trade down to cheaper products and switch channels to control their spending, they predict.

Nicola Knight added: “Retailers are implementing a variety of initiatives to win and retain shoppers. These are mainly focused on promoting value and loyalty schemes. This looks set to continue into 2023 as shoppers remain very price sensitive.”

The UK’s eating out market has had a buoyant first half of the year, with 2022 being the first year since the pandemic that operators across all sectors were fully open. However, even consumers in higher income groups are starting to make changes to spending as fears over increasing energy bills and mortgage repayments start to impact behaviour.

Nicola Knight concluded: “How the year finishes will depend on how consumers celebrate over the festive season. Next year the market is likely to see more spend switch to retail and recovery stall in many sectors.”

Strike resolution needed as hospitality set to lose £1.5 billion

Analysis by UKHospitality shows that the fresh wave of rail strikes set to hit the country in December will cost the sector £1.5 billion on strike days, similar to the level of disruption caused by the Omicron Covid-19 variant last year, it is claimed.

Hospitality businesses have already seen large-scale cancellations, which are unlikely to be rescheduled, and will have a devastating impact on the sector and its workforce at the most critical trading period of the year.

The transport secretary has been urged to bring all negotiating parties to the table to find a settlement to avert the strikes and the consequent damage to businesses and workers.

UKHospitality chief executive Kate Nicholls said: “The impact of rail strikes already this year has been devastating and wide-reaching, but this will pale in comparison to what we will see as a result of the upcoming strikes in December.

“This disruption will devastate hospitality businesses during its busiest period of the year and will once again force the public to cancel and rearrange plans, just as they were preparing for an uninterrupted Christmas. Businesses have already seen mass cancellations which won’t be rescheduled, costing the sector billions in lost sales.

“The Christmas period is not just good for businesses, it’s the most lucrative time for workers where they can benefit from additional overtime and higher levels of tips due to excess demand.

“These strikes damage all parts of society and it’s now time that the government proactively brings all partners to the table to deliver a solution that protects the nation’s workers and hospitality customers this Christmas.”