Eating out market to contract by 60-70%

The eating out market is forecast to decline by between 60-70% in 2020, according to the HIM & MCA Insight UK Recovery Report 2020.

The compound annual growth rate (CAGR) for spending on out of home food and drink is expected to fall by 23.1% between 2017-2020F, down from growth of 1.2% over the period 2014-2017.

In contrast, the CAGR for in home food and drink spend is set to grow, from 2.0% between 2014-2017 up to 4.5% for the period 2017-2020F, as consumers permanently shift to scratch cooking at home.

Consumers have remained cautious with their spending throughout the coronavirus pandemic, with 63% actively trying to save.

The report finds 45% of consumers are confident about their financial position over the next six months, compared with 21% who are concerned.

Nearly two-thirds (64%) are worried about visiting eating out venues.

It also reveals that the ability for operators to bounce back from the pandemic will be heavily based on their location, with reduced footfall in city centres making previously attractive sites less desirable as more people work from home.

Blonnie Walsh, head of insight at HIM & MCA Insight said: “The UK eating out market has been brought to its knees by the coronavirus pandemic and recovery will not come quickly. Certain channels and locations are certainly better placed to bounce back more quickly from the effects of coronavirus, such as coffee shops and fast food outlets, which are more suited to on-the-go visits and are less experience-led. Also, as was the case throughout the pandemic, those with delivery capabilities are likely to recover quicker than others.

“Regardless of channel, recovery is going to be hard, with over half of operators expecting it to take 13-24 months to get back to pre-crisis profitability levels. However, consumers are positive about their finances, so there remains an opportunity for operators to attract future spend.”