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Crunch-Time for Eating and Drinking Out Market as Consumers Seek Affordable Options

Weekly eating and drinking out frequency in the UK has declined by -6.7% year-on-year, according to the latest report from Lumina Intelligence’s Eating and Drinking Out Panel. The decline comes as consumers alter their behaviour in response to the current cost of living crisis.

The total market penetration has increased by +2ppts to 57% of UK adults having an eating or drinking out occasion in the 4 weeks ending 19 March 2023. The growth reflects more consumers returning to pre-pandemic norms, including commuting, and working away from home, highlighting that more consumers are having eating and drinking out occasions, but are doing so less frequently.

When consumers are having occasions, they are opting for lower spend visits. The report highlights that the dinner day-part has seen a decline in occasion share by-1.4ppts year-on-year, with all other day-parts benefiting. This shift is partly driven by the recovery in daytime occasions, as more consumers are out and about during the day, as well as a consumer effort to reduce out of home occasions at the most expensive day-part.

This realignment of day-part shares has impacted average spend growth, which is just +2.6%, notably behind inflation figures. Consumers are becoming more price-sensitive and are seeking more affordable options when dining out.

The report also reveals that restaurants have failed to attract a notable boost in occasions, even with the occurrence of Mother’s Day during the 2023 data period. The restaurant channel share of occasions has declined by -0.8ppts year-on-year, with retail increasing its share of occasions by +1.7ppts to 13.4%. Retail’s increase reflects growth in the proportion of consumers seeking out affordable and on-the-go food and drinks out of home.

Commenting on the findings, Senior Insight Manager Katherine Prowse said: “The cost-of-living crisis is having a notable impact on the eating and drinking out market. Consumers are adjusting their behaviour and seeking more affordable options when out, resulting in a decline in average spend growth and a shift in day-part shares. Restaurants, in particular, are facing challenges in attracting customers, as retail continues to grow its share of occasions. These insights provide valuable information to operators in the market, allowing them to adapt their offerings and strategies to meet changing consumer needs and behaviours.”