Changing consumer behaviour has helped the total out-of-home market grow by 5% in the 12 weeks to 24 March 2019, and quick service dining, coffee shops and cafés are reaping the rewards. Shoppers are leaning towards more experiential outlets and increasingly trading down from full service restaurants to faster, flexible options in the search for better value. This has helped the fast food market grow by 10% over the past year to account for over a fifth of all sector sales.
Experience-based dining is now a massive market, and every meal needs to be good enough for Instagram at the very least. Full service restaurants are inherently experiential, but even they will need to find new ways to stay ahead in this field. Over the past year, people have increasingly looked to base meals around other recreational activities and with more money being channelled in this direction, full service restaurants have seen sales decline by 6%.
In contrast, leisure venues and hotels have grown by 10% in the past 12 months while cafés and coffee shops have enjoyed growth of 8% by embracing their quick and convenient ethos and integrating themselves into consumers’ daily lives.
Over the past year, cafés and coffee shops have targeted high street locations and partnered with other businesses to deliver successful concessions. Primark’s flagship new store in Birmingham is a good example. With a huge store front, multiple cafés and exclusives from brands like Disney, people won’t just be visiting the outlet for its fast fashion but for an overall experience which feels more like a day out than a trip to the shops. While restaurants will always dominate at special occasions, outlets which offer dining in conjunction with another experience are winning day to day.
With economic and political uncertainty denting customer confidence, diners have shown themselves to be more reluctant to splash out on premium meals. There were almost five million fewer trips to full service restaurants in the most recent 12 weeks compared with last year as consumers cut down on high price spending, despite vouchering and promotion on the rise.
This does not mean people are parting with less of their money overall, only that this money is moving away from more expensive buys in formal settings to smaller, everyday purchases on the go. Spend on little luxuries is on the rise, with out of home coffee sales up by 5%, croissants by 7%, and savoury pastries up by 9% in the past year. Businesses that are tapping into these trends, adapting them to quick and flexible formats and offering affordable indulgence are finding success.