- This year’s good summer helped the total out of home (OOH) industry to see a return to traffic growth in Q3 2013 of +2% versus the same period last year
- To year end September 2013 most major channels posted declining visits. This was driven by the independent chains that make up almost half of the UK’s market. Branded pubs and restaurants are largely in growth, benefitting from the ability to respond to changing consumer demands
- Average individual spend has increased across some channels: Quick Service Restaurants (QSR), Travel & Leisure, College/University Canteen
- Visit declines in the sector can be attributed to fewer parties with kids, off-premises occasions, weekday occasions and non-deal/promotion, snacking and young adults (25-49). With an improving consumer mindset, we will be looking at Q4 2013 data to see if consumer behaviour catches up with that improved optimism.
Breakfast continues to rise and shine
This meal occasion enjoyed a +2.2% growth year end (YE) to September 2013. There is a real opportunity to develop breakfast in the Quick Service Restaurant sector in 2014, but operators need to act quickly before this market matures.
Social dining on the increase
Consumers are making more informed and considered meal and snack choices, in some cases swapping routine weekday visits in favour of shared family and friend oriented weekend ‘experiences’. Snacking is the major victim, dropping -1.5% to YE Sept 2013.
Pubs on the path to recovery
The pub recovery is led by the brands – both small and major – through visit growth driven by key occasions and consumer groups: parties with kids, parties with adults only, weekends, and older adults aged 50-64. All dayparts are performing well with the exception of snacking. Deals and promotions have been a major part of this growth. Meal occasions on deals grew +4.3% to YE September 2013, and overall pub deal usage rates of 29.6% are above the industry average (26%). A larger number of orders than ever in pubs are now non-alcoholic, with beer sales the biggest loser. Incident rates are now at 39%, with four fewer drinks consumed per 100 visitors.
The NPD view
Cyril Lavenant, director of foodservice UK for The NPD Group, said: “There is no one trend driving the UK foodservice market at the moment. Instead it is a complex picture by day part, consumer segment and category. Operators really do need to understand how consumers are behaving across the sector and how that is changing quarter by quarter if they are to tap into the growth areas, and address those that are static or in decline.
“There certainly are opportunities. The increase in average individual spend is a positive sign and operators need to give people the chance to trade-up, while not forgetting to maintain value on routine visits. Breakfast continues to be a bright spot with real opportunities, particularly for the QSR channel, to maximise it next year. Those providers who offer an experience for social occasions are well placed for success. However, the industry really needs to focus on reinvigorating core lunch and dinner day parts if there is to be sustained growth.”