Fast food and takeaways continue to outperform restaurants, with overall sales growth of 20.6 per cent and 7.2 per cent respectively
Average transaction values dip by 1.5 per cent, as consumers shift to cheaper, more varied dining options
Analysis of more than 8 million Barclays customers’ spending by Barclays Market and Customer Insights reveals shifting consumer culinary preferences
LONDON, 26th October 2018: Barclays has today launched a new report that reveals shifting consumer tastes in the restaurant and takeaway sector. Barclays Market and Customer Insights analysed the dining choices and spending of more than 8 million Barclays’ customers between July 2016 and June 2018. The aggregated data shows that while total saleswere up 11.5 per cent in the year ended July 2018, this strong overall growth masks a number of underlying trends.
Demand for fast food and takeaways is steadily increasing, with overall sales growth of 20.6 per cent compared to 7.2 per cent growth in ‘full service’ restaurant sales. While restaurants still claim the largest market share at 65.7 per cent, this represents a 2.6 per cent decline over the last year. By contrast, fast food and takeaway sales are up 20.6 per cent, now capturing 34.3 per cent of the market.
Less is more
The report also revealed that while customers appear to be dining more frequently, they’re doing so at a lower cost. Average transaction values have fallen slightly, by 1.5 per cent, over the two years covered by the analysis. This trend, coupled with the growth in online sales, clearly favours lower price-point outlets. Online transactions soared by 26.7 per cent, compared to 8.9 per cent for face-to-face sales. This growth has been fuelled by the growing popularity of easy-to-use delivery apps and online directory services.
The research also revealed that the top five growth spots – as measured by on-premises sales growth – are all outside London:
• Manchester (12.6 per cent)
• Cardiff (11.3 per cent)
• Birmingham (11.2 per cent)
• Newcastle (9.4 per cent)
• Chelmsford (9.3 per cent)
• London (2.4 per cent)
While the South accounts for the largest overall share of sales (67.3%), the North is generally performing stronger than the south. On-premise sales in the north grew by 12.3 per cent YoY in contrast to 5.8 per cent.
Brand loyalty down
According to the data, consumers are also choosing to spend their money on a greater variety of restaurant and takeaway brands, reflecting more adventurous tastes and the growing variety of dining options available, such as vegan choices. The average customer bought from 7.5 brands last year, compared to 7.2 the year before.
Philip Richardson, Director, Hospitality and Leisure, Barclays Corporate Banking, said: “Over-supply aligned with higher input costs is causing pressure in the market. That said, the demand for good locations remains strong – our Market and Customer Insights analysis has become increasingly important as operators seek to make informed decisions on their strategic expansion based on hard facts.”
Raj Pattni, Head of Insights Platform, Barclays, said: “Restaurant chains have faced more challenging trading in recent years, with property overheads up, business rates rising and consumer spend weakening. At the same time, consumers are increasingly opting for the convenience and affordability of fast-food outlets and eating at home. However, despite the emergence of digital-first delivery apps that we’ve become so accustomed to using, restaurants still claim an overwhelming majority of the market share. Outlets looking to get an upper hand and compete must be quick and nimble enough to react to shifting consumer tastes and evolve their in-store experience. “
Barclays Markets and Customer Insights service is now available to Barclays and non-Barclays corporate clients. It provides analysis of customer transactions, pinpointing precision data of where people spend. To find out more, head to https://insights.uk.barclays/MCI