Home News Insights February 1 2016

The Top Three Quarterly Trends Shaping the Great Britain Foodservice Industry

Consumer confidence in Great Britain continued to be positive, but it was lower in the fourth quarter of 2015 than it was in the third. Despite this decrease, it remained the highest within all European countries tracked by CREST®.

GDP increased slightly to +0.5 percent in Q4 compared with growth of +0.4 percent in the previous quarter. Construction and Production were down, but increases in Services and Agriculture drove the economy up. The exceptional mild weather experienced in the last months of the year encouraged Britons to go out more often than usual for this time of the year. Thus, retail sales increased +2.6 percent in December 2015 compared to December 2014.

This positive overall performance also had an impact on the out-of-home market. CREST data shows the foodservice market continued to grow its year-on-year spend at +3.6 percent in Q4 compared with +2.8 percent in Q3, which represents an added £453m consumer spend.

Growth was driven by a balanced mix of visits and average check increases, which rose by +1.9 percent and +1.5 percent respectively.

While doing their Christmas shopping, consumers chose to eat in quick service restaurants (QSR) more often. The channel continued to drive foodservice market growth, increasing traffic by +3.1 percent compared to 2014. Consumers also increased their visits to full service restaurants (FSR), which saw traffic grow by +1.9 percent compared to previous year.

In this edition of Topline Top Three, we review 2015 and share some good news for the foodservice market as we witness the second year of traffic growth, the rise of all dayparts, and the growth of non-deal traffic.

As always, if you would like to discuss this information in greater detail, just contact your NPD account representative.

Foodservice experienced its second year of continuous growth

2015 showed us we have more reasons to be optimistic. Britain’s good economic indicators and high consumer confidence overall encouraged consumers to go out more often. The result was consistent growth for the foodservice market.

The growth accelerated as the quarters of 2015 progressed. Q2 and Q3 grew traffic at a high level of +1.4 percent, only to be bitten by Q4 with its impressive +1.7 percent traffic increase compared to the previous year.

Total Out-of-Home
Visits Year-On-Year Growth

Source: The NPD Group/CREST®

All dayparts are now in growth

More encouraging news comes from the positive performance witnessed during all dayparts.

Both dinner and lunch grew visits at a rate of +1.5 percent compared to last year.

Whilst expected to slow down after a few years of great growth, breakfast kept on surprising us in 2015 and still managed to experience a striking +3.0 percent traffic increase compared to 2014.

Snacking did not show such an impressive performance, as it only grew by a shy +0.1 percent. However, one of the most promising signs from 2015’s performance is that the snacking daypart finally stopped declining!

Total Out-of-Home
% Traffic share and Year-On-Year Traffic Change

Source: The NPD Group/CREST®

Non-deal traffic grew

For the first time since the recession, consumers increased their non-promoted visits. This is a clear sign they felt more confident and were willing to spend more money.

Total Out-of-Home
No Deal/Promotion Traffic Year-On-Year Change

Source: The NPD Group/CREST®

Indeed, non-deal traffic dipped particularly low right at the beginning of the recession, from 2009 to 2011. It did not stop there – traffic remained increasingly reliant on deals over 2013 and 2014. Finally, 2015 put an end to this spiral with a +1.4 percent traffic increase.

Overall, 2015 showed clear signs of long-lasting improvement and recovery of the foodservice market. Not only did the market show positive growth for the second year, but the positive trends even hit areas that previously had been weak.

If everything remains on track, this could be the dawn of a promising full recovery in the years to come. Performance in 2016 will be key to understanding whether this is the case.

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