Two sides of the story for the hospitality market post lockdown
25th June 2020
Boris Johnson has finally confirmed 4 July to be the date for further easing of lockdown, including the re-opening of the hospitality sector. Many rules will apply and there is much work to do to implement safety regulations before this date, but a nationwide cheer has followed the announcement. In this context, the release of the HIM MCA UK Eating Out Market Report is very timely. Our report provides a comprehensive overview of the pre-coronavirus world of 2019, together with insights from the peak coronavirus quarantine, plus a future outlook for the hospitality industry as we move to post lockdown and ultimately into ‘adjusted normality’.
The lowest recorded consumer confidence since the financial crisis over a decade ago and a weakened economy will lead to heightened appreciation of value for money and cheap prices, especially since these were already two of the fastest growing needs in March 2020, just before the UK entered lockdown. Brands that can achieve the fine balance between attractive prices and robust business margins will be on the highway to recovery. Independent and privately funded service-led restaurants will be the most exposed to market conditions – even prior to the challenges brought by the pandemic, this sector had already seen a -3% decline from 2016-2019.Those brands fortunate enough to have robust investor backing are more likely to survive the storm, whilst the middle market will continue their fight to attract footfall.
According to our UK Eating Out Market Report 2020, the recovery will come from two directions. Firstly, quicker, convenience-led solutions will be more agile in the post-pandemic world of social distancing. Meanwhile, longer, but richer, experiential occasions will fulfil the invincible human desire to try new things. Over three-quarters of UK consumer have somewhat missed eating out at restaurants and there is a strong likelihood that, when considering where to eat out, consumers will opt for either fast and convenient solutions or a premium experience-led offering.
Whilst UK consumers have embraced home cooking during lockdown, the latest data from HIM MCA Channel Pulse records an increase in foodservice delivery and takeaway, as scratch cooking fatigue kicks in and ideas run out. The long queues following the re-opening of McDonald’s drive-thrus has clearly shown that pent up demand will lead consumers to venture out of home in order to save time in the kitchen for an affordable and indulgent meal.
On the other hand, for many consumers eating out of home is associated with higher quality ingredients, immaculate service and exciting experiences, which in turn is expected to drive footfall to more aspirational pubs and restaurants. On such special occasions, consumers are more likely to be open to trading up and thereby increasing their spend, which will bring a much needed boost to the eating out establishments which were forced to close their doors for more than three months.
We can only hope that consumers vote with their feet and return to the hospitality outlets they have missed to ensure a viable future for our industry, be it for a small ticket purchase on-the-go or indulgent treat occasions in a full-service restaurant.
UK Eating Out Market Report 2020
The Eating Out Market report provides comprehensive analysis of market and consumer trends that are impacting growth. It helps UK operators and their suppliers identify opportunities in the market and stay ahead in the face of economic pressures and evolving consumer demands.