Table of Contents
Executive Summary
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- Impact of COVID-19 on foodservice
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- Figure 1: Impact of COVID-19 on the eating out market, in short, medium and long term, 21 April 2021
- The market
- Sharp recovery expected in 2021…
- …but it will take until 2025 for the market to surpass pre-COVID levels
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- Figure 2: COVID-19 scenario forecasts, 2015-25
- The consumer
- Takeaways holding up the eating out market
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- Figure 3: Eating in vs ordering takeaway usage, March 2021
- Almost half of food delivery consumers have ordered more often
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- Figure 4: Changes in eating in vs ordering takeaway usage, March 2021
- Consumers keen to support independents
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- Figure 5: Purchase drivers, March 2021
- Opportunities for new revenue streams
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- Figure 6: Participation and interest in foodservice activities, March 2021
Category Winners and Losers
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- Winning sub-category: Home deliveries
- Winning sub-category: Dark kitchens
- Losing sub-category: Pubs/bars and breweries
- Losing sub-category: Lunchtime sandwich shops/food-to-go outlets
COVID-19 Consumer Timeline
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- Phase 1 – January-March – Consumers go into lockdown
- Phase 2 – March-June – Adapting to life in lockdown
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- Figure 7: Recorded daily number of confirmed cases of COVID-19 and deaths registered as relating to the virus, 30 January-31 August 2020
- Phase 3 – June-September – Emerging from the initial lockdown
- Phase 4 – September-December – Rise of the next wave
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- Figure 8: Recorded daily number of confirmed cases of COVID-19, 30 January 2020-28 March 2021
- Phase 5 – January-March – Winter lockdown and vaccine rollout
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- Figure 9: Cumulative number of first and second vaccines delivered in the UK, 10 January-4 April 2021
- Phase 6 – March onwards – The roadmap out of lockdown
The Post-pandemic Outlook for Foodservice
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- Consumers will continue to have a greater range of takeaway options
- Opportunities to cater to remote workers
- Eating outdoors is here to stay
- Staycations present new opportunities for the preferred ‘local choice’
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- Figure 10: Holiday bookings, 19 March-12 April 2021
The Economic Impact
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- A record drop in economic activity…
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- Figure 11: Annual percentage change in GDP, 2007-25 (fore)
- …as COVID-19 restrictions caused a severe fall in spending
- Consumer spending is heavily dependent on the path of the pandemic
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- Figure 12: Household consumption index, 2019-25 (scenario forecasts)
- Furloughs have saved millions of jobs…
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- Figure 13: Number of employments furloughed, time series, March 2020-February 2021
- …but unemployment is forecast to rise when state support ends
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- Figure 14: Quarterly unemployment rate, Q1 2008-Q1 2026 (fore)
- Under-25s have taken the brunt of COVID-19 job losses
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- Figure 15: Change in number of employees on payroll, by age, February 2021 vs February 2020
Market Size and Performance
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- Impact of COVID-19 on foodservice
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- Figure 16: Impact of COVID-19 on the eating out market, in short, medium and long term, 21 April 2021
- A 58% fall in sales over the course of 2020
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- Figure 17: Value of the UK foodservice market, 2015-20
- Al fresco dining options helped claw back some ground in summer 2020
- A temporary pause to the shift towards the experience economy
Market Forecast
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- Sharp recovery expected in 2021, but it will take until 2025 for the market to surpass pre-COVID levels
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- Figure 18: UK forecast for the value of the UK foodservice market, at current prices, 2015-25
- Long-term structural damage means it will be 2025 before sales hit pre-pandemic levels
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- Figure 19: UK forecast for the value of the UK foodservice market, at current prices, 2015-25
COVID-19 Scenario Performance
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- Mintel’s approach to predicting the impact of COVID-19
- Fundamental differences in how COVID-19 is affecting consumer markets
- The risk of vaccine-resistant strains of COVID-19 adds huge uncertainty
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- Figure 20: COVID-19 scenario forecasts for the foodservice market, 2015-25
- A £10.5 billion sales difference between Mintel’s rapid COVID recovery and extended COVID disruption scenarios
- A setback to the vaccination programme could extend social distancing into 2022
- Mintel’s rapid recovery scenario indicates a return to pre-COVID sales by the end of 2023
- COVID-19 market disruption: risks and outcomes
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- Figure 21: Summary of Mintel scenario expectations and the impact on the foodservice market, April 2021
Consumer Concerns over the Impact on Health
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- Exposure anxieties align with case numbers
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- Figure 22: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
- Exposure anxiety typically higher among over-55s
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- Figure 23: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) towards being exposed to the coronavirus, by age, 28 February 2020-12 March 2021
- Middle-age band fear transmitting virus
Consumer Concerns over the Impact on Lifestyles
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- Concerns about lifestyles impact outweigh exposure fears
- Consumers react to unprecedented lifestyle restrictions
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- Figure 24: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
- Lifestyle impact concerns high across all age groups
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- Figure 25: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) about how the outbreak could impact their lifestyle, by age, 28 February 2020-26 March 2021
Impact on Household Finances
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- Financial wellbeing has hit new heights despite the crisis…
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- Figure 26: The financial wellbeing index, January 2015-March 2021
- …but many still feel worse off than a year ago
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- Figure 27: Changes in household finances, January 2015-March 2021
- One in six have been furloughed at least once
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- Figure 28: Impact of COVID-19 on employment and working patterns, February 2021
- Income trends point to a two-track crisis and recovery
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- Figure 29: Impact of COVID-19 on personal income, February 2021
- Cuts to discretionary spending have kept household finances afloat…
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- Figure 30: Impact of COVID-19 on household debts, February 2021
- …and led to a record savings boost
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- Figure 31: Impact of COVID-19 on the value of savings in different products, February 2021
- Most are optimistic about the year ahead…
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- Figure 32: The financial confidence index, January 2015-March 2021
- …and looking forward to getting back to experiences
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- Figure 33: Financial priorities when COVID-19 is no longer a concern, February 2021
How the Pandemic Shaped Consumer Behaviour
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- Pent-up demand for eating out
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- Figure 34: Consumer anticipation of going out for a meal, 4 February-12 April 2021
- Indoor dining fears will continue as long as virus lingers
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- Figure 35: Comfort level going to a restaurant/bar indoors vs concern about exposure to COVID-19, 25 June-19 November 2020
- Takeaway participation broadly ties in with online shopping trends
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- Figure 36: Changes in online shopping vs ordering takeaways/home delivery more, 8 December 2020-12 April 2021
Foodservice Usage
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- Takeaways holding up the eating out market
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- Figure 37: Eating in vs ordering takeaway usage, March 2021
- Rise in home delivery driven by WFH shift
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- Figure 38: Eating in vs ordering takeaway usage, March 2021
- Operators in the suburbs benefit most from remote working shift
- Opportunities to meet takeaway demand in villages
- Drive-throughs help families and drivers buy takeaways safely
- Offering a range of ordering channels will attract a wider crowd
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- Figure 39: Repertoire of eating in vs ordering takeaway usage, March 2021
Changes in Foodservice Usage
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- Almost half of food delivery consumers have ordered more often
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- Figure 40: Changes in eating in vs ordering takeaway usage, March 2021
Foodservice Purchase Drivers
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- Promotions are needed to drive usage
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- Figure 41: Purchase drivers, March 2021
- The global vs British produce divide between young and old
- Consumers keen to support independents
- Young and older consumers’ differing priorities around hygiene
- Help consumers make healthful choices…
- …and strike the right balance with permissible indulgences
Participation and Interest in Foodservice Activities
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- Dark kitchens will generate new revenue streams…
- …while meal kits help operators to reach a nationwide audience
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- Figure 42: Participation and interest in foodservice activities, March 2021
- Present options for home delivery gifting occasions
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- Figure 43: Example of a gift set for home delivery
- Consumers use tech to stay safe
- Online engagement tools serve a niche audience
- Subscriptions unlock opportunities for operators to upsell
- Prepare for a boom in staycation reservations
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Central Forecast Methodology
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- Market drivers and assumptions
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- Figure 44: Key drivers affecting Mintel’s market forecast, 2020-24 (prepared 12 March 2021)
- Forecast methodology
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- Figure 45: Market forecast and prediction intervals, 2020-25
Appendix – COVID Scenario Performance Methodology and Assumptions
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- Rapid COVID recovery, central and extended COVID disruption scenarios outline
- Scenario methodology
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- Figure 46: Scenario performance, 2015-25
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