We need to talk about lunch…

Lunch anyone? Please say yes as it would appear us Brits are just not doing lunch out like we used to. Drawing on insights from MCA’s Eating Out Panel, this article outlines some of the woes that are afflicting the seemingly ever-growing plethora of retailers and operators fighting over share of our lunchtime stomachs and spending.

First off, let’s look at the stats. Over the year to March 2019, UK adults averaged 4.4 lunches out of home a month. This figure was down from 4.7 times three years ago. As such, lunch represents the meal occasion that has declined the most over this timeframe, falling by 7%. Put another way, this equates to 200 million fewer lunches. But this scary story does not end there, as in terms of average spending per lunch occasion, the rise of 9% is lower than either the c.15% seen at both breakfast and dinner.

Immediate answers behind the declining popularity of lunch include the combination of greater brown bagging and DIY activity, switching to out of home breakfast/snack options, skipping lunch entirely, shortening lengths of lunchbreaks and more working from home. Scratching below the surface of these, it is possible to detect the rising importance of both healthier eating and the need to make household budgets stretch further – and these are disproportionately important at lunch as this is the meal occasion that the majority of us eat out the most.

When we look at underlying consumer missions at lunch, there are a few additional factors at work from the main reasons to eat out. The leading mission, to have a get together with friends or family, has not changed over the past three years, continuing to drive 13% of lunch visits. However, there have been small declines in the proportion of customers lunching while out shopping (highlighting how weakening high street footfall trends are likely having an impact) and also, in a reduced proportion of consumers regarding lunch as a treat. Just maybe, and despite widening product and purveyor choice, some of the specialness of lunch is being lost, with functional considerations more to the fore. This is consistent with the small rise in increased lunching occurring because of a work/study break.

That lunches are getting healthier is evident in declining popularity of beef burgers, fish & chips and curry, as well as in less ice cream, chocolate and cola – but also, in higher consumption of brown bread, fruit and bottled water. What is also interesting at product level, is how the Top 10 most popular savoury products now account for a lower share than the 49% recorded back in 2016. This highlights how consumers are benefiting from wider product choice now and are being more adventurous with their lunch preferences. In turn, this reinforces the importance of continual new product development to ensure consumers do not become bored with existing assortments.

Some of the shifts in the purchase share mix by channel also support the rising importance of value for money considerations at lunch. Both pub and chain restaurants have lost share, while lower ticket channel winners include sandwich retailers, supermarkets to-go and coffee shops. These growing channels clearly also benefit from faster servicing of customer orders. In theory, this factor should play into the hands of fast food operators, but the share decline over the past there years contradicts this, suggests that other channels have improved their service speeds and that rising interest in healthier eating might just be having an influence.

So, if all is fair in love and lunch, then the two operators with most to smile about are McDonald’s and Greggs. Interestingly, these are two players with most to lose as they have the highest shares at 9% and 6% respectively. However, their professionalism stands out as during Q1 2019, they both put on the largest visit share gains compared with a year ago. Conversely, Burger King, Subway and Costa were less fortunate, recording the largest share declines. It has long been recognised that there is no such thing as a free lunch. Increasingly, it is evident that there is no such thing as an easy lunch ticket anymore.