Long-term growth for foodservice expected

THE UK’s foodservice sector will experience long-term growth now the worst of the recession is over, although it will take at least until 2016 to return to food sales levels of 2007.


That’s the prediction of Horizons managing director Peter Backman.


Speaking at the company’s annual briefing – “Success in Challenging Times” – Backman said that although the foodservice market had seen nominal growth of 2.1% in 2012, it had declined by 0.4% once inflation was factored in. Sales of food and drink in the UK’s foodservice market are currently worth £44.1bn.


Backman warned that operators must adapt to new demands to secure future growth. Many operators have responded to trading challenges by looking at new opportunities and serving food throughout the day, he explained. “The real winners have been snacking and the breakfast market. We think the two will grow considerably over the next few years.”


Sales of food through the eating out market are currently worth £32.8bn. Within that, 22% is from sales of snacks, which are expected to rise by 4.4% this year. Breakfast sales, which account for 9% of overall sales, will also rise by 4.4%, said Backman.


Lunch sales, currently 45% of the market, are predicted to rise by 0.6%, while evening dining could fall by 2.1% as consumers continue to shift their eating out patterns.


Four key issues for operators this year, said Backman, would be winning and retaining business, meeting customer expectations, protecting margins and coping with strong comparatives from the Queen’s Jubilee and the London Olympics.


“Companies that are financially stretched, dependent on the public sector, unprepared to adapt or failing to offer value for money, will be the ones to suffer in 2013. These are likely to be independent, tenanted or leased pubs and the healthcare and education sectors,” he added. “Conversely casual dining, coffee outlets and managed pub restaurants are likely to boost sales this year.”