Despite a backdrop of rising consumer confidence, Q1 2024 saw eating and drinking out market penetration fall slightly by -0.4ppts to 55.7%, reflecting the impact of poor weather and persistent economic pressures. The quarter witnessed the wettest February on record, prompting consumers to stay home and contributing to a -0.7% decline in the frequency of eating out occasions.

Economic pressures continued to affect households with children, leading to a decline in this demographic’s participation in the eating out market. Families faced with tight budgets opted to dine out less frequently, emphasising the need for operators to develop family-friendly promotions and value-driven menus to attract this segment back.

Those remaining in the market benefitted from reduced train strike action this quarter meaning evening socialising was less restricted, fuelling the recovery of dinner occasions which saw share growth of +0.9ppts year-on-year. Restaurants experienced the largest uptick in dinner occasions at the expense of QSR and pubs & bars, as consumers prioritised social dining over smaller, necessity-based food-to-go occasions. There has been a notable shift towards quality over quantity, with consumers prioritising fewer, more meaningful dining experiences.

Coffee and sandwich shops also saw channel share increase by +0.4ppts, benefitting from the growth of breakfast and drink only occasions. This growth was driven by demand for quick, convenient, and high-quality morning meals, as well as strong performance from brands like Caffè Nero, which successfully capitalised on the demand for specialty coffee with offerings such as the Honey Oat Latte launched in January.

There is a positive trend towards in-person dining, especially for lunch and dinner occasions. This shift suggests a stabilisation in delivery services post-pandemic and a renewed consumer preference for the ambience and experience of eating out. Click-and-collect services also saw an increase, particularly for lower-ticket items including breakfast and snacks, reflecting a growing trend towards convenience.

Quality of ingredients emerged as a critical factor for dinner choices, aligning with the rise in restaurant visits. Consumers are increasingly seeking value through high-quality and experiential dining options, while sustainability and social consciousness take a back seat.

This is exemplified by the consumer shift towards premium non-alcoholic beverages. Fruit juices and smoothies gained share across all day-parts, driven by a growing emphasis on quality and experience. Additionally, wine and cocktails have seen increased popularity at dinner, aligning with the overall move towards higher-quality dining experiences.

Operators have a prime opportunity to leverage elevated outdoor dining and socialising occasions with the promise of summer and warmer weather approaching.