UK food-to-go market is forecast to be worth £23.4bn by 2024, reports IGD

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The UK food-to-go market is forecast to be worth £23.4bn by 2024, up from £18.5bn in 2019, growing by 26.4%. According to new research from IGD, the channel is set to experience double the growth of the wider UK food and grocery retail market – 12.5% – over the next five years.

FTG channel 2019 (£bn) 2024 (£bn) 2024 market share % change 2019-2024 (CAGR)
Convenience & other retailers 2.9 3.8 16.1% 5.4%
Coffee specialists 3.3 4.3 18.2% 5.2%
Food-to-go specialists 5.0 6.3 26.9% 4.6%
QSRs 5.8 7.2 30.9% 4.5%
Supermarkets and hypermarkets 1.5 1.8 7.8% 3.6%
Total 18.5 23.4
4.7%

Source: IGD Research. Note numbers and shares may not appear to sum due to rounding. Figures calculated from full 2019 and 2024 market values.

Rhian Thomas, head of shopper and food-to-go Insight at IGD said: “Food-to-go remains a key growth opportunity for businesses, and one that appears particularly attractive given the structural and growth challenges being faced by UK supermarkets and hypermarkets right now.

“While there continue to be good opportunities for growth in this area, the gap will continue to grow between those businesses who are actively targeting food-to-go growth and those who simply want a presence in the channel. Opportunities remain, however, for those with clearly defined and relevant strategies.”

Convenience, forecourts and other retailers, such as Spar, Co-op, Tesco Express and Boots

  • Sales will increase from £2.9bn in 2019 to £3.8bn in 2024
  • Market share will increase from 15.5% in 2019 to 16.1% in 2024
  • Convenience, forecourts and other retailers will experience a CAGR of 5.4% between 2019 and 2024

Regarding convenience, forecourts and other retailers, Rhian Thomas said: “Convenience and food-to-go are increasingly intertwined, as food-to-go success becomes increasingly critical to the prospects of most convenience stores. Similar principles apply to the forecourt channel, where the added need to encourage dwell time among shoppers will grow in importance as the factors influencing where and how people stop on the road shift.

“Consumer expectations around convenience and forecourt food-to-go are rising fast, creating an opportunity for businesses to invest and upgrade, or else risk getting left behind. The good news here is that there’s lots of growth to go for, and in many locations there remains opportunity to do more to meet these evolving shopper needs. Those businesses who focus more on emulating competitors rather than investing in how they can innovate will meet the big challenges.”

Coffee specialists, such as Costa Coffee, Starbucks and Caffè Nero

  • Sales will increase from £3.3bn in 2019 to £4.3bn in 2024
  • Market share will increase from 17.8% in 2019 to 18.2% in 2024
  • Coffee specialists will experience a CAGR of 5.2% between 2019 and 2024

Thomas said: “Over the past 12 months we have seen significant developments from coffee specialists, with a clear trend towards the expansion of smaller, more niche chains. Expansion at the likes of Coffeesmiths Collective, with a repertoire of coffee chains under its umbrella, shows how the barista coffee experience is evolving.

“We are also seeing coffee shops developing their offer to appeal to different shopper needs, whether it’s a stronger all round food offer at the likes of Costa, Starbucks and Caffe Nero, a very targeted offer – such as waffles at Black Sheep Coffee – or a broader push into evening and alcohol, as we’ve seen at the likes of Grind and, globally, at Starbucks’ latest roastery openings in New York, Tokyo and Milan. Travel is also a growing priority, with Eurogarages being perhaps the highest profile driver behind Starbucks’ recent UK expansion, adding sites alongside forecourts across the UK and beyond.”

Food-to-go specialists, such as Greggs, Subway, Pret, Eat and Leon

  • Sales will increase from £5.0bn in 2019 to £6.3bn in 2024
  • Market share will move from 27% in 2019 to 26.9% in 2024
  • Food-to-go specialists will experience a CAGR of 4.6% between 2019 and 2024

Commenting on food-to-go specialists, Thomas said: “Food-to-go specialists include a wide selection of different operators, and within this segment we’ve witnessed contrasting fortunes and performance over the past year. What is clear, however, is that significant growth opportunities exist for those with a relevant proposition who target the right locations.

“While menus continue to evolve, with vegan and vegetarian lines gaining more profile on many menus in 2019, the location question is a fascinating one right now, as the combination of high rents and increased competition on high streets encourages a growing number of operators to vary their location strategy.”

Quick service restaurants (QSRs), such as McDonald’s, Burger King, KFC and Five Guys

  • Sales will increase from £5.8bn in 2019 to £7.2bn in 2024
  • Market share will move from 31.5% in 2019 to 30.9% in 2024
  • QSRs will experience a CAGR of 4.5% between 2019 and 2024

On QSRs, Thomas said: “The QSR channel has remained strong despite an increase in the choice of food-to-go options and a greater focus on healthier eating, which is not an area that QSRs are traditionally known for. But while not all players in this area have experienced fast growth, the combination of improved in-store environments and technology, along with targeting the online meal delivery channel have all been factors that are driving driven growth. McDonald’s is a good example of this, but they are far from the only innovators in this space, not least as plant-based options are increasingly introduced onto menus.”

Supermarket and hypermarkets, such as Asda, Morrisons, Tesco and Sainsbury’s

  • Sales will increase from £1.5bn in 2019 to £1.8bn in 2024
  • Market share will move from 8.1% in 2019 to 7.8% in 2024
  • Supermarkets and hypermarkets will experience a CAGR of 3.6% between 2019 and 2024  

Thomas said: “While IGD’s wider food retail market forecasts show continuing challenges for the supermarket and hypermarket channel, most of us still do a large portion of our food and drink shopping at these types of stores, meaning there is still much to play for. Expanded food-to-go and foodservice zones are a key strategy for these retailers to bring more shoppers into stores and encourage them to spend more while they’re there.”