New research from IGD predicts that the UK food-to-go (FTG) sector will grow 26.4% over the next five years to be worth £23.4bn by 2024. This is over double the growth rate – 12.5% – expected to be seen in the wider food and grocery retail market.
“Food-to-go remains a key growth opportunity for businesses, and one that appears particularly attractive given the structural and growth challenges being faced by UK supermarkets and hypermarkets right now,” said Rhian Thomas, Head of Shopper and Food-to-Go Insight at IGD.
“While there continue to be good opportunities for growth in this area, the gap will continue to grow between those businesses who are actively targeting food-to-go growth and those who simply want a presence in the channel. Opportunities remain, however, for those with clearly defined and relevant strategies.”
IGD’s latest UK food-to-go market report suggests that convenience chains and forecourt stores will see the strongest growth in the FTG sector with sales increasing from £2.9bn in 2019 to £3.8bn by 2024 (see table below) and their market share growing from 15.5% to 16.1%.
Thomas commented: “Convenience and food-to-go are increasingly intertwined, as food-to-go success becomes increasingly critical to the prospects of most convenience stores. Similar principles apply to the forecourt channel, where the added need to encourage dwell time among shoppers will grow in importance as the factors influencing where and how people stop on the road shift.
“Consumer expectations around convenience and forecourt food-to-go are rising fast, creating an opportunity for businesses to invest and upgrade, or else risk getting left behind. The good news here is that there’s lots of growth to go for, and in many locations there remains opportunity to do more to meet these evolving shopper needs. Those businesses who focus more on emulating competitors rather than investing in how they can innovate will meet the big challenges.”
Coffee specialists are also expected to continue to gain market share in the sector (from 17.8% in 2019 to 18.2% in 2024), with growth driven by the expansion of smaller, more niche chains and larger operators such Costa, Starbucks and Caffe Nero strengthening their all round food offer.
IGD predicts that FTG specialists, such as Greggs, Subway, and Pret, will see sales increase from £5.0bn to £6.3bn in 2024. However, their market share is expected to edge down from 27% to 26.9% over the five year period.
“Food-to-go specialists include a wide selection of different operators, and within this segment we’ve witnessed contrasting fortunes and performance over the past year. What is clear, however, is that significant growth opportunities exist for those with a relevant proposition who target the right locations,” said Thomas.
Quick service restaurants (QSRs), such as McDonald’s, Burger King, and KFC, will remain the largest channel in FTG with sales increasing from £5.8bn to £7.2bn in 2024. However, their market share is also expected to fall over the next five years (from 31.5% to 30.9%).
Thomas commented: “The QSR channel has remained strong despite an increase in the choice of food-to-go options and a greater focus on healthier eating, which is not an area that QSRs are traditionally known for. But while not all players in this area have experienced fast growth, the combination of improved in-store environments and technology, along with targeting the online meal delivery channel have all been factors that are driving driven growth.”
Meanwhile, FTG sales in supermarkets and hypermarkets are expected to grow from £1.5bn to £1.8bn in 2024, although the channel’s market share is set to fall from 8.1% to 7.8%.
Thomas said: “While IGD’s wider food retail market forecasts show continuing challenges for the supermarket and hypermarket channel, most of us still do a large portion of our food and drink shopping at these types of stores, meaning there is still much to play for. Expanded food-to-go and foodservice zones are a key strategy for these retailers to bring more shoppers into stores and encourage them to spend more while they’re there.”
| FTG channel | 2019 (£bn) | 2024 (£bn) | 2024 market share | % change 2019-2024 (CAGR) |
| Convenience & other retailers | 2.9 | 3.8 | 16.1% | 5.4% |
| Coffee specialists | 3.3 | 4.3 | 18.2% | 5.2% |
| Food-to-go specialists | 5.0 | 6.3 | 26.9% | 4.6% |
| QSRs | 5.8 | 7.2 | 30.9% | 4.5% |
| Supermarkets and hypermarkets | 1.5 | 1.8 | 7.8% | 3.6% |
| Total | 18.5 | 23.4 | 4.7% |
Source: IGD Research.
Note numbers and shares may not appear to sum due to rounding. Figures calculated from full 2019 and 2024 market values.
Download a sample of the IGD Retail Analysis UK food-to-go market forecast
NAM Implications:
- Full report well worth detailed analysis…
- …by all players in the FTG sector…
- Especially that FTG is growing at twice the rate of the food and grocery retail market…
- Especially by those suppliers actively targeting FTG growth…
