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Lumina Intelligence’s new Food to Go Report 2023 has revealed that despite slow recovery in passenger volumes and high street footfall, food to go increased by +31.7% in 2022 to a value of £21.4 billion, just +0.9% ahead of its 2019 total. The key drivers of growth are high inflation and a recovery in footfall.
The report predicts that food-to-go growth will outpace the total eating out market growth, and key channels such as grab-and-go, delis and coffee shops are well-placed to benefit from increased value scrutiny as shoppers opt for smaller luxuries.
Even more encouragingly, the UK food-to-go market is forecasted to value £22.2 billion in 2023, with a growth rate of +4.1%. The market is set to reach its highest level of outlet growth since the pandemic, and players in the sandwich and bakery, grab-and-go, and fast-food sectors are capitalising on opportunities for more diverse outlets.
Good news for indies
With warmer weather on the way, this is good news for indies such as delis, farm shops and food halls, creating fresh on-the-move options for conscious consumers.
According to Tina McKenzie, policy chair at the Federation of Small Businesses (FSB), “Think of food-to-go and your mind is likely to go to an independent business – a burrito van or a falafel stand, a food court or a deli, even a good old ice cream van. Consumers love spontaneity, novelty, and a unique experience – all of which can be provided in spades by food-to-go businesses.
“Anything indicating an upturn for independent food-to-go retailers is good news, and small businesses in this space can look forward to better weather encouraging people to get out and about.”
Andrew Goodacre, CEO of the British Independent Retail Association (BIRA), agreed, “We can expect the demand to continue to rise as people take advantage of the better weather to enjoy food outside.”
Catering to demand
With consumers’ priorities shifting in 2023, independent retailers will need to pay close attention to their customers’ needs over the coming months.
As Katherine Prowse, senior insight manager at Lumina Intelligence, explained, “This year’s report clearly shows the importance of understanding consumer behaviour when it comes to food-to-go. Operators need to be mindful of consumer habits and ensure they are meeting their needs and targeting key locations.”
This may be a daunting feat, but indies are well-placed to cash in on the opportunity. According to Andrew, “This opportunity will be a very competitive arena. Consumers will be looking for quality and value. Meal deals will become increasingly important as a way of establishing competitiveness.
“The small shops will face significant competition from the large supermarkets, and whilst a specialised food shop can offer something different, it will still need to be mindful of the value being sought by the consumer. I think also there should be a focus on small snacks alongside the standard meals.”
Tina added, “Food-to-go providers can make sure they’re making the most of their offering, by tracking sales to see what’s catching customers’ eyes, offering premium add-ons for a touch of luxury – and higher margins, considering free samples where appropriate to attract footfall, and offering deals to appeal to the budget-conscious.
“Councils and local government can help by making high streets and other retail areas as attractive and vibrant as possible, with careful consideration given to issues like parking, public transport, and street furniture.”