Delivery growth shows no signs of waning.

Delivery growth shows no sign of waning

According to the recently published Lumina Intelligence UK Foodservice Delivery Market Report 2022, the UK foodservice delivery market is forecast to grow +5.3% in 2022, to a value of £13.3 billion, as demand for delivery shows no signs of waning following the removal of coronavirus restrictions. The use of foodservice delivery has become habitual to consumers, the analysts observe, and, as a result, it is no longer an either/or scenario for operators, but a necessity in order to recover from the effects of the pandemic swiftly (for example, in December 2021, Deliveroo announced plans to open four new Editions dark kitchens across London, which will host contemporary fast food brands including Five Guys and Tortilla and branded restaurant operators including Pho and Rosa’s Thai).

The new report offers a definitive source of data and insight on the UK foodservice delivery market, covering the market and consumer trends set to drive growth over the coming years, analysing the size of the market by value, competitive landscape - split by aggregators and brands, consumer and future outlook.

In particular, the report identifies McDonalds (which has trialled a new concept to adapt higher volumes of delivery trading without compromising the dine-in experience) and Wagamama (looking to target hybrid workers with its new range of lunch boxes) as “delivery concepts to watch”.

Additionally, they identify home working as being an opportunity for lunch delivery, observing that foodservice delivery users ordering lunch are 27% more likely to be doing so ‘to spend time with my partner’, creating an opportunity to target couples working from home through lunchtime deals for two, they suggest.

Legislation including mandatory calorie labelling as well as healthier trends among consumers are enforcing the role of healthier eating across the market, the researchers report. Delivery aggregators should work alongside both branded and independent partners to develop nutritional information and messaging across marketing and menus, they propose and suppliers can aid operators with the new calorie labelling legislation by ensuring products feature clear portion suggestion alongside calorie and nutritional break downs.

Greggs report strong team, brand and financial position for future growth

In announcing their preliminary results for the 52 weeks ended 1 January 2022, Greggs say that they are well placed to execute an ambitious strategic plan.

Total sales were up 5.3% on 2019 level (comparison with 2019 sales considered more helpful as 2020 figures include the period of shop closure in Q2 2020) to £1,229.7 million (53 weeks ended 1 January 2022 (2020: 53 weeks ended 2 January 2021, 2019: 52 weeks ended 28 December 2019)) compared with 2020: £811.3 million and 2019: £1,167.9 million. Like-for-like (LFL) sales in companymanaged shops (excluding franchises) with a calendar year’s trading history were 3.3% down on 2019 level and there was a pre-tax profit of £145.6 million (2020: £13.7 million loss, 2019: £108.3 million profit). There was a strong cash position supporting planned capital investment programme and a special dividend (40p per share), the company reported. Colleague profit-sharing was recommenced (£16.6 million to be shared with their people). 131 new shops had opened in 2021, with 28 closures meaning 103 net openings and 2,181 shops trading as at 1 January 2022. From 2022, they will be targeting 150 annual net new shop openings, with the potential for at least 3,000 shops in the UK over time. At the same time, 200 refurbishments are planned in 2022 to support growth in additional channels with plans to extend late opening to 500 shops in the year ahead, offering core menu plus hot food trials They had extended their delivery reach from 1,000 to 1,300 shops to complement evening availability and planned further recruitment of, and engagement with, Greggs App customers, supply chain investment having identified optimal locations for future investment in supply capacity to facilitate growth ambition. The majority of year one Greggs Pledge targets had been met (food waste reduction both in their shops and their manufacturing sites, and extention of the proportion of items on their shelves that are healthier choices). In the first nine weeks of 2022, LFL sales in company-managed shops were up 3.7% compared to the 2020 level, and for same period LFL sales in companymanaged shops were up 44.2% against the lockdown-affected period in 2021. “Our results and achievements in 2021 show that we have emerged from the pandemic both stronger and better as a business. I would like to thank, once again, all of our teams across the country who rose so well to meet the challenges of the last two years,” said Roger Whiteside OBE, chief executive. “We have started 2022 well, helped by the easing of restrictions. Cost pressures are currently more significant than our initial expectations and, as ever, we will work to mitigate the impact of this on customers, however given this dynamic we do not currently expect material profit progression in the year ahead. “Despite these near-term pressures, we continue to believe that the opportunities for Greggs have never been more exciting. Our investment over recent years has left the business wellplaced to move quickly as the economy recovers and we drive our ambitious plans to become a larger, multi-channel business.”