Signs of a shift in consumer behaviour.

Despite restrictions on indoor service lifting following ‘freedom day’, deliveries and takeaways are set to maintain a significant share of restaurant and pub groups’ operations, the latest CGA & Slerp Hospitality at Home Tracker has revealed (CGA is an on premise measurement, insight and research consultancy and Slerp is an online ordering solution and digital growth platform for the hospitality industry).

Their latest report shows sales in July were 206% higher than in July 2019—a drop on the growth in June (225%) and May (273%), following the return of indoor service in June and ‘freedom day’ in July. Although the lifting of all restrictions across hospitality has led to an increase in eating out, delivery has maintained its 20.5% share month-on-month while takeaway sales (defined as being collected from an outlet by the customer, including Click & Collect and Drive-Thru) declined by 1.3%.

This correlates with the significant growth in delivery sales compared to 2019, which in July was nearly three times higher than takeaways, they observe. In total, delivery and takeaways accounted for over a third of restaurant and pub groups’ sales in July.

“As consumers returned to eating and drinking out following restrictions lifting, growth has naturally begun to slow in delivery and takeaway sales. However, it’s clear that consumer behaviours have shifted and hospitality at home will remain an important consideration,” said Karl Chessell, CGA’s business unit director - hospitality operators and food, EMEA.

“Understanding the balance between out-of-home and at-home preferences will be key to shaping sales and marketing strategies for all brands, as consumers continue to embrace the delivery and takeaway trend.”

“Hospitality at home remains key for our sector and it shows with online delivery market share remaining at 20.5%. With the multiple challenges facing the sector as it reopens, it is now needing more than ever a focused approach to delivery as an incremental business stream,” said JP Then, founder of Slerp.

“It’s exciting to see businesses starting to hire dedicated online ordering experts and create exclusive online offerings to continue to power growth. This is especially key for marketing to consumers during the upcoming seasonal period.”

The CGA & Slerp Hospitality at Home Tracker is a leading source of data and insight for the delivery and takeaway market, providing monthly reports on the value and volume of sales, with year-on-year comparisons and splits between food and drink revenue. It offers a benchmark by which brands can measure their performance, and participants receive detailed data in return for their contributions.

CGA’s partners on the Tracker are Azzurri Group, BrewDog plc, Burger King UK, Cote Restaurants, Gaucho Grill, Giggling Squid, Honest Burgers, Nando’s Restaurants, Pizza Express, Pizza Hut UK, Prezzo, Rosa’s Thai, TGI Fridays UK, The Restaurant Group, Tortilla, Wagamama and YO! Sushi (anyone interested in joining the Tracker should contact Karen Bantoft at karen. bantoft@cgastrategy.com).

Hospitality sector business investment halved

Business investment in the hospitality industry was found to have halved during Q1 on an annual basis, analysis of the latest ONS data by business tax relief specialists, Catax, has revealed.

Business investment by hotels and restaurants collapsed 52% (£702m), falling from £1.4bn in Q1 2020 to £649 between January and March, they reported. This was a 27.7% fall on the previous quarter and a long way off the sector’s all-time high of £2.2bn in Q4 1997, they claim.

It was also dramatically worse than the performance of UK industry as a whole, they observed. UK business posted a 16.9% annual fall in business investment across all sectors in the first quarter, dropping an estimated 10.7% on a quarterly basis to sit 17.3% below pre-pandemic levels (Q4 2019), according to ONS data. By comparison, UK GDP shrank 1.6% in the first quarter, down 6.1% year on year and 8.8% below pre-pandemic levels at the end of 2019, according to ONS data.

Mark Tighe, CEO of business tax relief consultancy Catax, said: “The hospitality industry hasn’t been out of the news over the past 18 months as the sector’s woes have closely tracked the nation’s fitful attempts to rid itself of Covid restrictions. The end is now finally in sight and, with it, the sector should see the back of such dramatic variations in its levels of business investment. A long-awaited recovery is well on the way.”