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Research from IGD has revealed that the UK food-to-go channel will be worth £18.9bn this year, which is 3% more than its pre-Covid value in 2019.
The market has performed better than predicted since the pandemic, but rising inflation has thrown a spanner in the works as this is projected to slow by the end of the year and throughout 2023 as consumers battle rising energy, fuel and food costs.
The role of foodservice
The pandemic caused cafés, delis and restaurants to rethink how they operate, which led to a food-to-go revolution.
As Nicola Knight, senior analyst for Food-to-Go and author of the forecasts, explained, “Foodservice businesses were the biggest beneficiaries of pent-up demand for food on-the-go last year because of all the innovation they put into working around lockdowns, such as flexible delivery solutions and click and collect offers.
“But as the cost-of living-crisis comes in these operators will be under pressure as they become more of a premium option compared with lower priced food-to-go alternatives from a retailer, or preparing food at home.”
In fact, the next 18 months will be a challenging period for the sector, mainly for coffee and food-to-go specialists, as operators attempt to balance rising costs with helping consumers to save money. With no swift end to the cost-of-living crisis in sight, indie retailers have an opportunity to cash in on this, by focusing on providing value, quality and variety in their food-to-go ranges.
Nicola added, “Key opportunities for retailers over the next 18 months will include strengthening their meal deal offers as consumers become more value-led, and utilising customer data to create tailored offers that are relevant and savings-focused. There’s also an opportunity for them to increase food-to-go ranges to meet consumer needs across a wider variety of meal occasions.”
The hybrid working effect
More than a third of the UK’s office-based workforce is still working from home (at least for part of the time), according to the Office for National Statistics (ONS). In fact, fewer than one in 10 say they want to return to their desks five days a week – hybrid is officially the new normal.
And with rising fuel costs, commutes are becoming an unappealing expense. Instead, workers would rather spend the petrol cost on small luxuries, such as a coffee from their favourite local café or a takeaway lunch from the high street deli.
According to Dan Barron, an expert in health food at FDReviews, independent retailers, particularly those with a local footfall, will find that “reviewing their offering and adapting to this new flexible but healthier worker could provide a gateway to a new sales opportunity” in 2022.
Independent retailers such as farm shops and food halls can capitalise on this by stocking high-quality lunch options and bakery items.
Food-to-go has also evolved through the hybrid working revolution, as options now include those that can be heated at home for workers who have to rush back to their makeshift desks.
For example, popular food-to-go chain Leon has now begun to target health-conscious home workers with the launch of a range of “plant-rich” soups and salads into major supermarket Sainsbury’s. These heat-at-home soups provide the perfect example of how indie retailers can innovate to create food-to-go options outside of the classic sandwich or salad.
While the cost-of-living crisis is presenting a challenge to independents, riding the food-to-go resurgence could be the key to staying afloat in 2022.