Latest data from Lumina Intelligence Eating & Drinking Out Panel shows that in the 12 weeks ending 12 June, penetration has increased just 2.0ppts and has more recently been unable to match highs seen across April 2022, falling to 56% in the final week of the period.
In the same period, average spend increased just 2%, despite high levels of inflation and opportunities for growth, including the Jubilee weekend and warmer weather.
Purchasing lunch or a snack out of home increased 1.4ppts and 1ppts, respectively, as more workers returned to offices and purchased meals on the go. However, dinner occasions have seen a decline in popularity, with the day part share of dinner visits falling 1.6ppts despite an increase in average spend. There has been a 7.0% decline in spending on the snacking day part, signifying consumers are reducing spend on less necessary items.
Across all day parts, there has been a reduction in the number of under 18-34 year olds eating out in the last quarter. The cost of living crisis is affecting this age group, the most lucrative category for eating and drinking out. Lumina Intelligence noted that the proportion of 55+-year-olds eating out is increasing, presenting an opportunity to cater more for the needs of this demographic.
18-24 year olds, affected by the cost of living crisis, are turning to cheaper options such as QSR, with this channel seeing the proportion of 18-24-year-olds visiting in the past 12 weeks increasing by 3ppts. There was reductions in young people choosing to eat at restaurants, demonstrating a need for this more expensive channel to respond with initiatives such as promotions or voucher schemes to boost appeal to younger consumers.
Katie Prowse, Senior Insight Manager at Lumina Intelligence, commented: “The rising cost of living continues to bite consumers and have a knock-on effect on eating and drinking out behaviour. Despite the extra Bank Holiday and the Queen’s Jubilee celebrations, spend and penetration remained flat.
“Consumers are cutting back on discretionary spending, which is evident by the decline in the treat mission, which dropped across lunch, dinner and snack, by 1ppts, 3ppts and 2pts, respectively during the past quarter.”
NAM Implications:
- Surprise, surprise…
- 18-34 yr olds experiencing fall in discretionary spending.
- Well what do you know?
- Key that all stakeholders in these out-of-home hospitality areas…
- …factor in realistic impacts of cost increases into their forecasts.
- Before all is revealed when the tide goes out…
