2021
9
UK COVID-19 and Foodservice: A Year On Market Report 2021
2021-05-06T04:09:08+01:00
OX1044877
2195
137666
[{"name":"Foodservice","url":"https:\/\/store.mintel.com\/industries\/foodservice"}]
Report
en_GB
“Although a drop in inbound tourism will hurt some foodservice operators, especially those based in city centres, many will benefit from UK consumers’ interest in exploring regional British cuisines as…

UK COVID-19 and Foodservice: A Year On Market Report 2021

£ 2,195 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the UK COVID-19 and Foodservice market, including the behaviours, preferences and habits of the consumer.

The foodservice industry is one of the industries that has been hit hardest by COVID-19, and it will be one of the industries that takes longest to recover. A market that is usually heavily dependent on dine-in revenue has seen consumers become nearly four times as likely to order a takeaway than eat in at a food outlet/restaurant since the start of the pandemic.

However, there is reason to be optimistic for a bullish recovery in foodservice spending during the rest of 2021 due to pent-up demand for eating out, as 43% of consumers are most looking forward to going out for a meal once social distancing measures are relaxed.

As working from home looks set to remain the norm for many office workers for a while longer, lunchtime sandwich shops/ food-to-go formats will suffer from the decline in office working/ commuting. On the flipside, the shift to working from home for many employees is expected to see some eating out expenditure redistributed to foodservice venues within suburban and rural areas. There are opportunities for foodservice brands to increase their number of outlets situated along local high streets and in outof-town locations, whilst the drive-through concept is likely to gain popularity as some consumers continue to avoid public transport.

Read on to discover more details or take a look at all of our Food and Foodservice market research.

Quickly understand

  • The impact of COVID-19 on the foodservice market.
  • Changes in foodservice participation since the start of the pandemic.
  • How the pandemic will shape consumer behaviour and eating out in future.
  • Consumer participation and interest in emerging foodservice formats.
  • Foodservice innovations that meet changing consumer needs and expectations.

Expert analysis from a specialist in the field

Written by Trish Caddy, a leading analyst in the Food & Drink sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Although a drop in inbound tourism will hurt some foodservice operators, especially those based in city centres, many will benefit from UK consumers’ interest in exploring regional British cuisines as renewed interest in staycations presents new opportunities for the local food and drink experience.
We also expect ongoing momentum in the takeaway and home delivery segments as more operators will focus on modernising these functions, including development of drive-throughs and click-and-collect services.

– Trish Caddy, Senior Foodservice Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on foodservice
      • Figure 1: Impact of COVID-19 on the eating out market, in short, medium and long term, 21 April 2021
    • The market
    • Sharp recovery expected in 2021…
    • …but it will take until 2025 for the market to surpass pre-COVID levels
      • Figure 2: COVID-19 scenario forecasts, 2015-25
    • The consumer
    • Takeaways holding up the eating out market
      • Figure 3: Eating in vs ordering takeaway usage, March 2021
    • Almost half of food delivery consumers have ordered more often
      • Figure 4: Changes in eating in vs ordering takeaway usage, March 2021
    • Consumers keen to support independents
      • Figure 5: Purchase drivers, March 2021
    • Opportunities for new revenue streams
      • Figure 6: Participation and interest in foodservice activities, March 2021
  3. Category Winners and Losers

    • Winning sub-category: Home deliveries
    • Winning sub-category: Dark kitchens
    • Losing sub-category: Pubs/bars and breweries
    • Losing sub-category: Lunchtime sandwich shops/food-to-go outlets
  4. COVID-19 Consumer Timeline

    • Phase 1 – January-March – Consumers go into lockdown
    • Phase 2 – March-June – Adapting to life in lockdown
      • Figure 7: Recorded daily number of confirmed cases of COVID-19 and deaths registered as relating to the virus, 30 January-31 August 2020
    • Phase 3 – June-September – Emerging from the initial lockdown
    • Phase 4 – September-December – Rise of the next wave
      • Figure 8: Recorded daily number of confirmed cases of COVID-19, 30 January 2020-28 March 2021
    • Phase 5 – January-March – Winter lockdown and vaccine rollout
      • Figure 9: Cumulative number of first and second vaccines delivered in the UK, 10 January-4 April 2021
    • Phase 6 – March onwards – The roadmap out of lockdown
  5. The Post-pandemic Outlook for Foodservice

    • Consumers will continue to have a greater range of takeaway options
    • Opportunities to cater to remote workers
    • Eating outdoors is here to stay
    • Staycations present new opportunities for the preferred ‘local choice’
      • Figure 10: Holiday bookings, 19 March-12 April 2021
  6. The Economic Impact

    • A record drop in economic activity…
      • Figure 11: Annual percentage change in GDP, 2007-25 (fore)
    • …as COVID-19 restrictions caused a severe fall in spending
    • Consumer spending is heavily dependent on the path of the pandemic
      • Figure 12: Household consumption index, 2019-25 (scenario forecasts)
    • Furloughs have saved millions of jobs…
      • Figure 13: Number of employments furloughed, time series, March 2020-February 2021
    • …but unemployment is forecast to rise when state support ends
      • Figure 14: Quarterly unemployment rate, Q1 2008-Q1 2026 (fore)
    • Under-25s have taken the brunt of COVID-19 job losses
      • Figure 15: Change in number of employees on payroll, by age, February 2021 vs February 2020
  7. Market Size and Performance

    • Impact of COVID-19 on foodservice
      • Figure 16: Impact of COVID-19 on the eating out market, in short, medium and long term, 21 April 2021
    • A 58% fall in sales over the course of 2020
      • Figure 17: Value of the UK foodservice market, 2015-20
    • Al fresco dining options helped claw back some ground in summer 2020
    • A temporary pause to the shift towards the experience economy
  8. Market Forecast

    • Sharp recovery expected in 2021, but it will take until 2025 for the market to surpass pre-COVID levels
      • Figure 18: UK forecast for the value of the UK foodservice market, at current prices, 2015-25
    • Long-term structural damage means it will be 2025 before sales hit pre-pandemic levels
      • Figure 19: UK forecast for the value of the UK foodservice market, at current prices, 2015-25
  9. COVID-19 Scenario Performance

    • Mintel’s approach to predicting the impact of COVID-19
    • Fundamental differences in how COVID-19 is affecting consumer markets
    • The risk of vaccine-resistant strains of COVID-19 adds huge uncertainty
      • Figure 20: COVID-19 scenario forecasts for the foodservice market, 2015-25
    • A £10.5 billion sales difference between Mintel’s rapid COVID recovery and extended COVID disruption scenarios
    • A setback to the vaccination programme could extend social distancing into 2022
    • Mintel’s rapid recovery scenario indicates a return to pre-COVID sales by the end of 2023
    • COVID-19 market disruption: risks and outcomes
      • Figure 21: Summary of Mintel scenario expectations and the impact on the foodservice market, April 2021
  10. Consumer Concerns over the Impact on Health

    • Exposure anxieties align with case numbers
      • Figure 22: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
    • Exposure anxiety typically higher among over-55s
      • Figure 23: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) towards being exposed to the coronavirus, by age, 28 February 2020-12 March 2021
    • Middle-age band fear transmitting virus
  11. Consumer Concerns over the Impact on Lifestyles

    • Concerns about lifestyles impact outweigh exposure fears
    • Consumers react to unprecedented lifestyle restrictions
      • Figure 24: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
    • Lifestyle impact concerns high across all age groups
      • Figure 25: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) about how the outbreak could impact their lifestyle, by age, 28 February 2020-26 March 2021
  12. Impact on Household Finances

    • Financial wellbeing has hit new heights despite the crisis…
      • Figure 26: The financial wellbeing index, January 2015-March 2021
    • …but many still feel worse off than a year ago
      • Figure 27: Changes in household finances, January 2015-March 2021
    • One in six have been furloughed at least once
      • Figure 28: Impact of COVID-19 on employment and working patterns, February 2021
    • Income trends point to a two-track crisis and recovery
      • Figure 29: Impact of COVID-19 on personal income, February 2021
    • Cuts to discretionary spending have kept household finances afloat…
      • Figure 30: Impact of COVID-19 on household debts, February 2021
    • …and led to a record savings boost
      • Figure 31: Impact of COVID-19 on the value of savings in different products, February 2021
    • Most are optimistic about the year ahead…
      • Figure 32: The financial confidence index, January 2015-March 2021
    • …and looking forward to getting back to experiences
      • Figure 33: Financial priorities when COVID-19 is no longer a concern, February 2021
  13. How the Pandemic Shaped Consumer Behaviour

    • Pent-up demand for eating out
      • Figure 34: Consumer anticipation of going out for a meal, 4 February-12 April 2021
    • Indoor dining fears will continue as long as virus lingers
      • Figure 35: Comfort level going to a restaurant/bar indoors vs concern about exposure to COVID-19, 25 June-19 November 2020
    • Takeaway participation broadly ties in with online shopping trends
      • Figure 36: Changes in online shopping vs ordering takeaways/home delivery more, 8 December 2020-12 April 2021
  14. Foodservice Usage

    • Takeaways holding up the eating out market
      • Figure 37: Eating in vs ordering takeaway usage, March 2021
    • Rise in home delivery driven by WFH shift
      • Figure 38: Eating in vs ordering takeaway usage, March 2021
    • Operators in the suburbs benefit most from remote working shift
    • Opportunities to meet takeaway demand in villages
    • Drive-throughs help families and drivers buy takeaways safely
    • Offering a range of ordering channels will attract a wider crowd
      • Figure 39: Repertoire of eating in vs ordering takeaway usage, March 2021
  15. Changes in Foodservice Usage

    • Almost half of food delivery consumers have ordered more often
      • Figure 40: Changes in eating in vs ordering takeaway usage, March 2021
  16. Foodservice Purchase Drivers

    • Promotions are needed to drive usage
      • Figure 41: Purchase drivers, March 2021
    • The global vs British produce divide between young and old
    • Consumers keen to support independents
    • Young and older consumers’ differing priorities around hygiene
    • Help consumers make healthful choices…
    • …and strike the right balance with permissible indulgences
  17. Participation and Interest in Foodservice Activities

    • Dark kitchens will generate new revenue streams…
    • …while meal kits help operators to reach a nationwide audience
      • Figure 42: Participation and interest in foodservice activities, March 2021
    • Present options for home delivery gifting occasions
      • Figure 43: Example of a gift set for home delivery
    • Consumers use tech to stay safe
    • Online engagement tools serve a niche audience
    • Subscriptions unlock opportunities for operators to upsell
    • Prepare for a boom in staycation reservations
  18. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  19. Appendix – Central Forecast Methodology

    • Market drivers and assumptions
      • Figure 44: Key drivers affecting Mintel’s market forecast, 2020-24 (prepared 12 March 2021)
    • Forecast methodology
      • Figure 45: Market forecast and prediction intervals, 2020-25
  20. Appendix – COVID Scenario Performance Methodology and Assumptions

    • Rapid COVID recovery, central and extended COVID disruption scenarios outline
    • Scenario methodology
      • Figure 46: Scenario performance, 2015-25

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