The delivery market is expected to grow by 7.8% in 2023 to reach a total value of £14.4bn, according to new insight from Lumina Intelligence.
Wide-ranging investment in delivery services, including development of aggregator platforms, optimisation of brand sites and prominent marketing activity will drive growth, the UK Foodservice Delivery Market Report 2023 finds.
High inflation and increases in fees will in-part contribute to a robust growth figure, with volumes suffering as cost-conscious consumers reduce market penetration and frequency in 2023.
Value-scrutiny will be a crucial consideration in 2023, with 57% of those not ordering delivery doing so to save money.
The most important age group in the market – 25-34s – has seen the largest decline in share of delivery occasions, over-indexing in wanting to save money as a barrier to ordering delivery.
Cost of living pressures are expected to continue to impact consumer behaviour until at least early 2024, meaning operators need to ensure that value messaging, reward schemes and subscription models are being utilised.
The majority of market segments are continuing to grow share as the delivery market matures and becomes more segmented.
Channels including restaurants, fast food, coffee shop/sandwich, bakery and pubs are seeing delivery command a higher share of revenue as availability increases and demand endures.
Wider availability on the supply side has been met with consumer demand, as dinner now accounts for less than two in three delivery occasions.
Breakfast, lunch and drink-only occasions have increased share year-on-year, as coffee emerges as a key opportunity.
A wider variety of delivery players is contributing to growth at different day-parts, with future market growth hinging on consumers moving away from treat-led ordering to habitual spending.
Socialising missions have increased in 2023 with delivery perceived as a more budget friendly alternative to eating out.
Consistent growth at a compound annual growth rate (CAGR) of 5.3% from 2023F-2026F will see the market reach a total value of £17.0 billion in 2026.
The market is expected to continue its pre-pandemic trend of total eating out market share growth, as operators continue to invest in delivery propositions as a revenue stream.
Further technological advancements will provide increased efficiencies for aggregators and operators alike, with current efficiencies including stacking.
