New research reveals that some shopping habits formed during lockdown are here to stay, with almost a fifth (18%) of Brits signed up to subscription services such as restaurant meal kits. Of those that use food subscriptions, over a quarter (27%) now rely on them for at least half of their meals.
Barclaycard Payments, which processes nearly half of the nation’s credit and debit card transactions, has found that two in five (40 %) with subscriptions are also planning to increase their reliance on the kits, because of the convenience they offered during lockdown.
To cater to this consumer demand, while 44% of grocery food and drink businesses already provide a subscription service, a further quarter (25%) are in the process of developing one.
Eight in 10 (82%) of subscription product vendors surveyed say their customer acquisition has continued to rise despite the easing of restrictions – and predict that the digital and direct-to-door subscription sector will remain popular.
In fact, food and drink businesses forecast that the value of subscription services bought by UK consumers could grow by an additional 35% on average over the next year.
In line with this optimism, two thirds (67%) of retail businesses plan to launch more subscription services in the future and 72 % see subscription services as a way to keep up with the competition, as many brands introduce their own versions.
This continued demand and popularity has implications for the future of the hospitality industry. Almost three quarters (73%) of all those surveyed predict subscription services will lead to brands permanently changing their supply chain for more flexibility. This includes building more ‘ghost kitchens’ in the food industry, with kitchens developed for online deliveries only.
Meanwhile 66% of all retailers said brands will investigate their inventory processes for more flexibility as a result of the continued growth of subscriptions.
Merchants felt offering subscription services offered a range of benefits to their business including a more reliable and predictable source of revenue (72%) and savings on retention-based marketing, as customers are signed up to repeat products (70%). Three quarters (75%) also felt subscriptions helped them build better customer relationships through more regular contact.
Marc Pettican, president of Barclaycard Payments, said: “We’ve seen many retail trends accelerate since early 2020 and food and drink is no exception. During lockdowns consumers increasingly signed up to subscriptions to replicate restaurant quality meals at home, while also enjoying the added convenience. Even though normality has resumed for many of us, and restaurants are benefiting from diners returning, it’s clear some of our behaviours have changed for good.
“Many consumers have changed their weekly food shopping habits to include subscriptions within their meal plans. From learning new recipes to trying new foods, it’s apparent many of us have become more comfortable cooking at home. In tandem, we have seen the hospitality industry sit up and take notice, adapting their businesses to take advantage of this trend, which offers new streams of revenue and opportunities for customer acquisition.”