Growth in the Food To Go (FTG) market is showing signs of subsiding but recovery will be aided by the rise of healthier products, more affordable sustainability and tech-led convenience, the latest MCA data shows.
The Food To Go Market Report 2018 reveals the sector is set to grow by 2.8% to a value of £20.7bn this year. This outstrips the 1.5% forecast for the total eating out market but lags behind the 3.2% growth shown by FTG in 2017 and 4.3% experienced in 2016.
The report suggests that the market is under pressure from faltering consumer demand impacting visit frequency and intense competition restricting scope to capture higher transaction values.
Physical expansion of FTG-focused market segments is also slowing, expected to reach a rate of 1.6% in 2018, to c146,000 outlets, down from a CAGR of 1.9% between 2015-2018 and 2.6% between 2012-2015.
Prices at FTG specialists have increased by c.3% year-on-year, implying a flat market. Operators with a major FTG focus increased prices largely in line with inflation over 2017, averaging at 3%. With total growth of 3.2% in 2017, underlying volume growth in the market was effectively flat, driven by decreasing consumer visits. 2018 is expected to follow suit, with visit frequencies remaining under pressure.
The report reveals consumer insight showing that only 3% of FTG purchases are currently pre-ordered online or via an app and only 13% are paid at a self-service till. However, 35% of consumers would like to see more eating out operators offer a click & collect service, and 44% prefer to pay at a till than at a counter, with 16-34s strongly over-indexing for both.
Healthier eating also continues to rate highly for consumers, with 40% wanting healthier choices in the next 2-3 years, ahead of more hot food (34%) and more loyalty schemes (20%).
The report also shows that FTG consumers are highly impulsive and influenceable. Only 31% of food to go decisions are fully pre-planned, including whether to go on a to-go visit, where to visit and what to buy. 26% of FTG occasions are completely spur of the moment across all three decision making stages. Promotional deals/part of a meal deal are the main reasons behind impulsive purchases in-store.
MCA forecasts FTG growth rates will pick up from 2019, accelerating to a level of 3.3% per year between 2018-2021.
The report concludes: “The 2018-2019 period will be characterised by slower growth, driven primarily by Brexit-related macroeconomic factors, not least lower investment levels, weakening consumer confidence and pressure on average spend per head. MCA believes that the long-term fundamentals of the Food To Go market – demand for convenient, affordable and high quality food – remain firmly in place, however, and that growth rates will recover after macroeconomic pressures ease. This growth will be accelerated by the rise of healthier FTG products offered by operators across the spectrum; affordable sustainability used to drive visits, such as promotions targeting reusable coffee cups; and tech-led convenience speeding up transaction times, including new mobile payment solutions, self-ordering kiosks and smarter till systems.”
To find out more or to order a copy of the report, please contact enquiries@mca-insight.com
