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Latest Eating In vs Dining Out report reveals that both retail and foodservice will grow in 2021

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The latest Eating In vs Dining Out report – produced by insight and analysis providers IGD, in collaboration with foodservice consultant Peter Backman – forecasts 12% growth in 2021, for the UK food and drink market. The forecasted increase is driven by strong retail growth from January to March and foodservice sales which will begin to strengthen from July onwards as pent-up demand for socialising boosts the sector. Foodservice will grow by 54% (£18.6bn) vs 2020. Some of this growth will impact retail, but elevated levels of home working, at-home social gatherings and financially stretched shoppers who are unable to divert spend to eating out, will see the retail sector continue to grow.

Nicola Knight, Senior Retail Analyst at IGD, said: “The latest industry growth forecasts, combined with the Office for Budget Responsibility predictions for a slightly quicker than expected economic recovery, are reassuring for both retailers and operators. The reopening of the eating out sector and lifting of social restrictions will increase social dining both in and out of home and will give the market as a whole a significant boost. The value of retail is up £1.8bn on 2020 and £14.5bn on 2019.

On dining out, Peter Backman, Foodservice Consultant said: “Foodservice will see low levels of sales for almost half of 2021, due to a combination of lockdown restrictions and alfresco-only eating and drinking. But, as we move into the second half of the year, growth will set in, with pubs and restaurants leading the way. Hotels, leisure and travel-related hospitality will continue to be negatively affected, as will workplace dining, driven by working from home.”

According to the report, the key to unlocking opportunity for both retailers and operators is understanding the K-shaped recovery and its influences on shopper behaviour. The recovery will see higher income households who have accrued substantial savings – estimated to be a significant “pot” of over £100bn – contrast to lower income households who face financial challenge due to the ending of government support and rising unemployment, particularly amongst younger people.

Peter adds: “Affordability and accessibility will be the two watchwords for the eating out market. Those under financial pressure will be less likely to eat out, but when they do, QSR (‘quick-service restaurants’) and food-to-go are the most likely options. On the whole, operators in these sectors have been in a much stronger position than most during the pandemic, thanks to takeaway and delivery and this continued demand will potentially enable them to prosper”.

The report takes a quarter-by-quarter analysis to help businesses in both sectors plan for the year ahead.

For more information visit www.igd.com

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