The Top Three Quarterly Trends Shaping the Great Britain Foodservice Industry

Gross Domestic Product (GDP) growth slipped slightly from +0.8 percent to +0.7 percent in the third quarter of the year, and borrowers received more good news: interest rates fell to 1.2 percent — RPI fell slightly from 2.4 percent to 2.3 percent. Unemployment rates — sitting at 6 percent, and down from 6.5 percent in Q2 — offered a significant source of optimism in Great Britain’s continuing economic recovery.

Those improvements, as well as a warm summer, reflected positively on the foodservice industry. The industry saw a +1.6 percent rise in Q3 2014 compared to the same period a year ago. That translates to £164 million in extra consumer spending. Consumers ate out more often (+0.6 percent in visits) and spent more (+1.1 percent in average spend per visit) in the third quarter this year than they did in Q3 2013.

The quick service restaurant (QSR) channel continued to outperform the market. Consumer spending in QSR increased by +2.6 percent this quarter.

Full service restaurants (FSR) managed to stay flat (+0.3 percent in visits), driven solely by a boost from casual dining (+13.3 percent vs. year-ago).

In this edition of Topline Top 3, we look at Great Britain’s out-of-home visit growth in the context of Europe, the momentum of casual dining, and women’s visits to quick service restaurants.

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Foodservice growth in the U.K. is an exception in the European landscape

Improvement in the British economy and positive consumer confidence in Q3 helped the British foodservice market get back to growth with more and more visits made (+0.9 percent vs. year-ago).

Total Commercial sector
Traffic % Growth —  YE Sept 14 vs Y.A.

Source: The NPD Group/CREST®, YE Sept 2014

In Spain, Italy, and France, the persisting economic difficulties and lower consumer confidence continued to affect the number of visits. Despite the economic recovery, Germany has not yet experienced the positive effect of rising confidence.

Casual dining, the new trend changing the face of U.K. foodservice, keeps on accelerating its long term rise (+11 percent vs. 2010), with double-digit year-on-year growth this quarter (+13.3 percent).

Casual Dining — Visit Index vs. Total Out of Home

Source: The NPD Group/CREST®, Q3 '14

Casual dining managed to attract the weekend dinner family time thanks to a good combination: enjoyable and diversified food at an affordable price in a pleasant and family-friendly atmosphere.

The quick service restaurant is not as relevant to women as to men anymore, as female adults-only occasions flattened (+0.3 percent) whilst on the rise for male adults (+3.0 percent).

Key concerns arise when looking at traffic from women of all ages (below 65) for all dayparts (except breakfast), especially for on-the-go occasions during the week.

Total Quick Service Restaurants
% Change vs. YA

Source: The NPD Group/CREST®, YE Sept 2014

By contrast, QSR increasingly attracts males through most dayparts and demographics.

This shows an increasing long-term fulfillment of male eaters’ needs at the expense of the female audience. The QSR channel will need to address women’s requirements in order maintain growth in the long term.

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