Insight leading casual dining chains are benefiting from this move alongside an emphasis on product and service quality.
% of total spending increase by 2020
App-based orders to almost double by 2020 Visits originating digitally – customers using digital kiosks or order screens in a foodservice outlet or ordering online or via apps for delivery or takeaway/grab and go – will exceed one billion per year for the first time by the end of 2020. The use of apps should see a particularly rapid increase, with visits that originate from an app (click-and-collect and delivery apps) forecast to leap 88% between now and the end of 2020. This means if app-based orders perform as predicted, they will have almost doubled in visit terms.
On premise 12%
Takeaway 39%
Total app visits (m) (delivery and collection)
Delivery 36%
441
22%
rise in amount consumers will spend on delivery by the end of 2020 to create a market worth £5.8bn
The next two years will see a continuation of that core story – the pressures affecting on-premise eating and drinking. The old habit of going shopping and finding a place to sit down and eat is still important for many but is at risk as more people shop online. That’s why we predict all the meaningful growth in foodservice will be off-premise as smartphones continue to dominate and the high street reduces in importance. The eating-out industry is fast adapting to these bigger trends by focusing more of its investment into attracting off-premise visits. Modest growth in the large takeaway and grab-and-go channel, supported by the continuing delivery revolution, is enough to provide 88% of spending growth for the entire British foodservice industry in the next two years. The growth of drive-thru is part of a trend towards more convenience and a result of consumers spending less time on the high street. But operators must address the large price gap between on-premise and off-premise. The average on-premise cheque of £7.17 is almost twice the £3.66 for off-premise purchases. Is that good for the industry?
QSR as big as ever We also see a continuation of the established trend of consumers trading down to cheaper eats when dining out. The quick service restaurant (QSR) channel that includes well-known burger, bakery and
68
235
coffee chains is likely to attract 41 million more visits annually by the end of 2020 to reach almost 6 billion visits a year. This will represent more than 53% of the entire British foodservice industry in visit terms. We forecast QSR will attract £1.53bn more spend by the end of 2020 to reach £24.6bn.
Absolute change in visits (m) 2020 versus 2018 41
-65 OOH
QSR
Casual dining to grow visits and spend Casual dining will also see strong growth in visits and spend. By the end of 2020 it will be attracting an additional 43 million visits to represent 5.5% of all OOH visits, while spend will jump 15.5% (£960m). By contrast full-service restaurants will continue to decline, with a loss of 63 million visits or 9.3%. Similar to their QSR cousins, casual dining operators have been quick to expand into delivery. All
PROPEL QUARTERLY SUMMER 2019 www.propelhospitality.com
2018
2020
Technology is a key theme and our forecasts indicate any future growth in foodservice visits will be overwhelmingly tech-driven. Operators know the full-scale implementation of digital order channels – offering convenience, engagement and a new experience – is key to survival and growth in a sluggish, oversupplied market. Operators are important in any foodservice forecasts because their creativity and vision ensure the health of this extraordinarily dynamic industry. What happened in the famous Monty Python sketch that introduced us to the Arthur Ludlow Memorial Baths? The first two contestants – portrayed by Graham Chapman and Michael Palin – failed to capture Proust’s seven-book novel in a few succinct sentences and, sadly, the next contestants – the Bolton Choral Society – fared no better. That led to a more creative approach to identify the evening’s winner – but you’ll need to find the sketch online to remind yourself of the outcome. However, “visits down, spend up” will probably be the right summary for the British foodservice industry to the end of 2020 – and that can be completed in a couple of seconds.
Dominic Allport is insight director foodservice UK at The NPD Group
All charts: Source: NPD CREST/NPD Foodservice Outlook
Drive-thru 13%