New research published today by IGD entitled Catering for the Consumer predicts that by 2025 the proportion of sales via foodservice could equal and begin to overtake food retail sales in the UK.
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The foodservice market is complex so predicting its future is difficult. However, IGD has identified the main factors, which will ensure growth and also those likely to hinder growth in this market. IGD classifies these as Promoters and Inhibitors. IGD believes that by 2025 foodservice sales will overtake retail sales for the following reasons:
PROMOTERS
Growing affluence –
disposable income doubled between 1972 and 1998. A greater disposable income provides more money for leisure activities, including eating out.Changing cooking skills –
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By GlobalDataMarket forces
– concentration in the UK market and ever more lean US operators will lead to more consolidation and increased buying power, greater professionalism and efficiency in the foodservice marketplace.Demand for convenience –
increasingly busy lifestyles encourage a culture of immediate gratification. When it comes to food, consumers often know what they want to eat, when they want it and where they want it. Conveniently located foodservice outlets fulfil consumer needs quickly.VAT reduction
– the VAT discrepancy between food retailing and foodservice may eventually be removed as part of European tax harmonisation. Potentially, if there is harmonisation, foodservice prices could fall relative to those in food retail, which would stimulate demand.However, caterers must watch out for the factors challenging their growth. These are INHIBITORS and include:
Home Meal Replacement –
as the demand for low price meals prepared outside the home increases, HMR offered by the retailers will become a more direct substitute for foodservice.Automated kitchens –
the kitchen of the future might include self-monitoring and replenishing fridges and cupboards, smart appliances to talk the cook through the recipe, even a home baking machine, in other words, everything designed to make cooking easier at home. Hi-tech kitchens are already a reality in the catering sector and the technology will evolve rapidly for the home.Sourcing and food scares
– in the midst of a food scare, consumers are most likely to trust reputable and well-established brands. The foodservice sector, with its many small businesses, may suffer.Snacking
– snacking and grazing is now socially acceptable. For some people it has replaced regular meal times. Whilst caterers may benefit by providing “eat in the hand” products, retail channels are best placed to meet this demand with their existing ranges of convenience products at convenient locations.Growing cost gap
– currently few consumers make a direct comparison between retail food value for money and foodservice as they are perceived as very different occasions. However, as foodservice increasingly competes for more everyday, functional eating and retailers develop more luxury food items, the value comparison will be made more frequently.New leisure pursuits –
rising affluence has stimulated an increasing variety of ways to spend time and money. Holidays, keeping fit, the Internet and computer games are just some of the potential competitors for consumer expenditure and time.ENDS
For further information please contact Jane Whiteley, tel: 01923 851917, mobile 07802 437579, Jane Beard, tel: 01923 851910, mobile 07770 640448 or Catherine Ellwood, tel: 01923 851916.
EDITORS’ NOTES
