Data from independent foodservice research agency, The NPD Group, reveals sales of sausage rolls could feel the impact of the Government’s plan to levy 20% VAT on hot food bought to eat out of the home.
Market analysis from NPD reveals the appeal of hot lunchtime favourites, as sales of pasties, sausage rolls and other hot food have shown strong growth in recent years. Given the fact a similar proportion of sausage rolls and pasty servings were sold via the quick service retail (QSR) channel in 2011 – 82% of all sausages roll servings and 83% of pasty servings – NPD analysts believe should plans for the introduction of 20% VAT proceed, retailers may have the same concerns they have recently voiced over the impact of the tax on sales of pasties.
The potential blow to the popular section of the hot food sector comes at a time when the market for pasties and sausage rolls has enjoyed significant growth. Servings of sausage rolls in the QSR channel increased by 4.8% between 2010 and 2011, adding 7m servings in four years to reach 124m servings last year.
At the same time, pasty sales have had a reversal of fortune. After a significant decline in the year ending December 2009 and December 2010 (down by 3.1m and 15.3m servings respectively), pasty servings delivered a strong 8.5% increase in 2011 compared to 2010, and the number of servings reached 111.5m.
Looking at the market overall, NPD’s analysis reveals an increase – from 54% to 60% – in the number of hot food servings bought in the last four years, while cold food servings declined by 1.8% in 2011 compared to 2010.
Commenting on the fate of the hot food market, NPD’s business development director for foodservice Europe, Guy Fielding, said: “Hot sausage rolls and pasties are a popular lunchtime staple, generally eaten on weekdays and in fast food outlets. The fact consumers may be ‘trading down’ to less expensive options, but still wanting to enjoy hot food, is also an important factor in their growth. The proposed VAT introduction definitely has the potential to damage that growth. The extent of that impact is something we’ll be able to gauge only in the next six months.”