Having grown 38.2% last year, the UK food-to-go market is forecast to grow by another 31.8% in 2022 to a value of £21.3bn. This would mean the market fully recovers from the impact of Covid and actually exceeds its 2019 pre-pandemic value.
According to the Lumina Intelligence UK Food To Go Market Report 2022, key channels including convenience and supermarket grab and go, coffee shop/cafés as well as travel are expected to exceed 2019 turnover this year. Meanwhile, branded traditional fast food is expected to see a slower recovery, with delivery gaining large proportions of key operators including McDonald’s and KFC’s sales mix.
Travel, coffee shops/cafés and street food have seen the strongest growth in share over the last five years, whilst convenience store grab and go remains the largest channel in the food-to-go market with a share of 28.3%. However, the channel is losing share to higher spend food-to-go specialists as consumer quality expectations increase.
In outlet terms, Lumina Intelligence expects the UK food-to-go market to see a net increase of 1,517 sites in 2022, a growth rate of 1.0%, led by sandwich & bakery, coffee shop and travel segments.
The report notes that operators across the food-to-go market including Greggs, Costa Coffee and Pret A Manger are diversifying outlet coverage in line with changes to consumer habits following the pandemic, with operators targeting more drive-thru, travel led sites, as well as neighbourhood and suburban locations.
The top ten brands by turnover saw unrestricted trading in 2021, leading to an average growth rate of 43.2% following overall food-to-go sales declines in 2020. Both city centre and suburban focused sites benefitted from hybrid working patterns, catering to consumers commuting and working from home, especially for lunch occasions.
Half of the top ten brands were found to have increased their share of the food-to-go market in 2021, bringing their combined share to 34.5%, up 1.8 ppts from 2020.
The report suggests that 30% of UK adults have a food-to-go occasion at least once per week. Drink and lunch hold the biggest share of such occasions by day part – a combined 66% of occasions. The drink occasion has seen a further boost to day part share of 2.4ppts with hot drink on the go purchases taking a greater share amid a raft of operator innovation.
Meanwhile, familiarity, good value for money, and voucher/promotion/loyalty activity has increased as drivers to choosing a specific establishment.
Gregg’s, Costa Coffee, and McDonald’s lead the food-to-go market by share of occasions, and each gained share in the 12 weeks end ending 30/01/2022. Greggs has the highest share of occasions, accounting for 12%, with Costa Coffee accounting for 11% and McDonald’s 10%. These brands are said to have benefited from consumer desire for tried and tested brands.
The report concludes that the UK food-to-go market is expected to total £23.0bn in 2025, with growth of 2.5% per annum from 2022-2025.
Outlet growth in the market is expected to reach its highest figure in six years, at 1.2% in 2025, to a net value of 156,120 outlets.
“During the pandemic, the very nature of food-to-go was hampered by tight restrictions on movement. However, the channel has always been well placed to recover post-pandemic,” said Blonnie Whist, Insight Director at Lumina Intelligence.
“This is apparent in our forecasts, which indicate a full recovery by the end of 2022. This growth is set to be driven by a number of factors. Firstly, the reopening of hospitality, as well as recovery in city centre footfall, will drive food-to-go occasions as more consumers return to offices at least some of the working week. Secondly, recovery in travel and tourism will boost food-to-go throughout key parts of 2022, including the summer months. Thirdly, food-to-go is a relatively low ticket and is well placed to capitalise on tighter budgets as consumers feel the impact of cost increases across food, fuel and utility bills as well as taxation.”
NAM Implications:
- NB. a full recovery by 2022 depends on:
- reopening of hospitality
- recovery in city centre footfall (more consumers return to offices)
- recovery in travel and tourism
- food-to-go being a relatively low ticket, capitalising on tighter budgets
- Your call…
- …best use some of your gut feeling.
