Modest growth in UK eating and dining out

The latest data from Lumina Intelligence’s Eating and Drinking Out Panel (EDOP) reveals that the UK’s eating and drinking out market has experienced a modest increase in penetration and a fall in frequency in the 12 weeks ending 19/02/2023. The average penetration has increased by just +2.0ppts yearon-year, hindered by the rising cost of living and train strike activity. Despite a reduction in Covid-19 concerns and the World Cup, the market failed to gain the anticipated boost.

Consumers have been impacted by rising prices, leading to an +8% increase in average spend. However, the pubs and bars segment has seen the largest spike in share occasions year-on-year (+1.3ppts), mainly due to recovery from a weak comparison. Pubs and bars also benefitted from increased lunchtime patronage during the World Cup.

The data shows that consumers are prioritising value for money. Lunch has enjoyed the largest increase in day-part share this year, with retail and catering channels both up by +0.6ppts yearon-year. Value for money has seen the most significant growth as a reason for choosing an establishment at breakfast (+3ppts) and lunch occasions (+2ppts), as consumers prioritise affordability when on the go.

A slight increase in penetration and a decrease in frequency illustrates current market pressures. However, Britain’s leading pub, bar and restaurant groups reported a fifth month of year-on-year growth in February, with pubs seeing the biggest rise, with sales up nearly 7% – according to the latest Coffer CGA Business Tracker produced by CGA by NIQ, The Coffer Group and RSM UK.

February sales at Britain’s leading managed restaurant, pub and bar groups were 3.9% ahead of last year on a like-forlike basis, the data reveals.

The Tracker has now recorded year-onyear growth for five consecutive months. However, the figure is substantially down from 10.1% in January, and well below the current rate of UK inflation.

Pubs performed the best of the Tracker’s three market segments to continue a solid start to 2023, with likefor-like sales 6.9% ahead of February 2022. Restaurants achieved modest growth of 1.9%, but the bars segment continued to struggle, with sales down 10.1%.

London continued to outpace the rest of the country with sales up 7.6%, while outlets outside the M25 reported a 3% improvement. However, growth is still below the current rate of inflation.

Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said: “Hospitality trading is now consistently ahead year-on-year, and consumer appetite for pubs in particular remains undimmed. That demand allows the sector to be optimistic when planning for the long term. However, the real issue is the cost of doing business right now. It was therefore disappointing to hear about the lack of energy support in the Budget.”

Interest rates have also jumped to 4.25%, and UKHospitality CEO, Kate Nicholls, said: “The staggering rises in energy, food and drink costs, in particular, have given hospitality businesses stark choices... in order to survive.”

CGA collected sales figures directly from 75 leading companies for the latest edition of the Coffer CGA Business Tracker

Delivery and takeaway numbers slip in January

While pubs and restaurants have had a good start to the year, January’s delivery and takeaway sales at Britain’s top managed restaurant groups were 2% down, according to CGA by NielsenIQ’s latest Hospitality at Home Tracker.

It continues a plateauing of the ordering-in market that has now seen year-on-year sales drop for 15 months in a row. January’s delivery volumes fell by 12% as consumers reduced order frequency, but spent more when they did so.

Nevertheless, delivery and takeaway sales remain substantially ahead of pre-Covid-19 levels, after lockdowns cemented them in consumer’s habits. Combined, they accounted for 17 pence in every pound spent with managed restaurant groups in January 2023.