London, 23rd March 2021: It’s 12 months since the UK’s first COVID-19 lockdown, and one of the sectors that has been most heavily impacted is hospitality. Here, The NPD Group picks out eight eating out/eating in trends from the pandemic’s first year (March 2020 to February 2021) and suggests how they will unfold as lockdown eases. From a surge in home deliveries to the growth of collection, the rise of eating on a deal, the surge of drive-thru, treating to beat boredom, a doubling of choosing vegan and veggie options, the rise of al fresco dining and a laser-like focus on delivering the best customer service, here’s how COVID-19 has changed the way we eat out (and in).
Delivery: In the 12 months of COVID, delivery’s share of out of home eating has more than doubled
Ordering takeaway main meals for home delivery has been a big part of locked down life and, according to The NPD Group’s consumer data, spend increased 50% during the 12 months to February 2021. Many consumers used delivery services for the first time – particularly older and more affluent groups. The NPD Group’s consumer research suggests about half of these new users of delivery services will stay. Looking ahead, Dominic Allport, Insights Director (Foodservice), The NPD Group says: “With more working from home, delivery has moved beyond the evening meal to an option for all times of the day. Deliveries of snacks and coffee has emerged as a growth area which will continue to expand in 2021.”
Collection: Worth £400 million to Britain’s local restaurants during February 2021
Chains, pubs, and local restaurants alike increased their digital ordering capabilities during lockdowns and tiering. While The NPD Group’s consumer data shows that spend on digital click and collect orders has grown 51% in the 12 months to February 2021 to reach £1.5bn, hungry consumers - mainly from older age groups - were still happy to pick up the phone and talk directly to their local takeaway. In total, almost £3.5bn has been spent on collected food and drink orders from restaurants over the 12 months to February 2021 - that’s 11% of total spend on out of home eating. Dominic Allport explains: “Collection is here to stay. Even as lockdown ends, operators will continue to invest in digital this year with apps for ordering, paying and loyalty schemes for takeaway food.”
Meal deals and money off incentives: average spend on deal up by 24%
Over the 12 months to February 2021 more than one-third of all eat out spend (almost £11bn out of a total of £31bn) was driven by some sort of deal or promotion as restaurants tried to maximise trade. A big part of this was last August's Eat Out to Help Out Scheme, when a record 42% of eating out spend was on a deal. While this government-backed scheme is unlikely to be repeated, looking for a deal is now hardwired into most consumers’ behaviour, so promotions will continue to remain important during the rest of 2021. The good news for restaurants is that over the last year per person spend on deal is 9% higher and has grown twice as fast as spend not on deal. Dominic Allport, Insights Director (Foodservice), The NPD Group: “As we exit the pandemic, we expect the importance of promotions and deals in attracting customers to grow as operators fight for market share. Consumers have shown they’re willing to both buy more and spend more than average on a deal which bodes well for trading levels in future.”
A 50% increase in the importance of Drive-thru spend for coffee chains and quick service restaurants
Drive-thru has benefitted from lockdowns and tiering. The NPD Group’s data indicates that £2.3bn was spent at Britain’s 2,000 quick service restaurants (QSR). Coffee chains with drive-thru in the 12 months to February 2021 saw a 14% increase in spending versus the same period a year ago. Drive-thru spending hit record levels in 2020, accounting for as much as 16% of all spend on QSR and coffee chains in December. Overall, during the 12 months since COVID-19 has impacted the hospitality sector, drive-thru spending represented 12% of total spend, a 50% increase in importance compared to the situation pre-COVID.
Dominic Allport says: “Already on the rise, the popularity of drive-thru in Britain has had a boost from COVID-19 as people tend to feel more secure in their cars. As we face a new way of living, with more time in our vehicles and a greater reliance on online and digital ordering, operators are investing in drive-thru. We expect to see more pop-up drive-thrus and for menus to expand to pizza, Indian, vegan and other cuisines.”
Boredom boosts treating occasions which have grown in importance during COVID-19
Over the last year everyone has been desperate for an edible treat to help relieve the boredom of lockdown. When motivated by the need for a treat, average spend per person is 10% higher than average. The NPD Group’s data shows that since the start of the pandemic consumers have spent more than £8.2bn on treating occasions, accounting for 26% of all spending in the 12 months to Feb 2021, compared to 18% a year earlier. While having a takeaway dinner remains a key part of many lockdown routines, people are increasingly looking for treats that include snacks at other times of the day. Breakfast, while still only representing 6% of treating spend, has seen average spend per person jump by 25%, almost twice the overall increase, as consumers have started indulging in a coffee or a snack via delivery.
Vegetarian and vegan
More than £1bn of consumer spending is now linked to offering vegetarian and vegan menu options. This represented almost 4% of total foodservice spending in the year to February 2021, up from around 2% pre-COVID. At 15% of all visits, breakfast is when offering a vegetarian or vegan menu option is most important for consumers, an over-index of 31% compared to breakfast’s overall importance.
Eating and drinking al fresco
Operators are maximizing every outdoor space they can find, including pavements and car parks, to be able to serve food and drinks from April 12th while keeping social distancing in place. Temporary easing of the planning rules has aided this move, which looks likely to be longer term. Dominic Allport says: “Creativity is the name of the game here. With some scientists warning social distancing will be in place for years, not months, operators need to find ways to serve customers outside, bearing in mind the British weather. Many city centre venues don’t have much or any outdoor space, and these businesses will need to focus on COVID measures indoors while ramping up takeaway options.”
Dominic Allport says: “Restaurant operators have more routes to the customer than ever before. While this helps maximise revenue, it makes the important task of delighting and retaining customers more complicated. To really stand out and win market share during reopening, restaurants must make sure their customers feel engaged and empowered to maintain their loyalty. With the increased importance of digital, having an excellent experience online or via an app and making sure it seamless integrates with other elements of the customer experience will be increasingly critical.”