How many times do British people visit food or beverage outlets between midnight and 7am each year? The answer is 257 million for the year ending (YE) May 2018 according to figures released today by global information company The NPD Group. That’s a small proportion of Britain’s eat-out or out-of-home (OOH) foodservice industry, which registered more than 11.3 billion visits for YE May 2018 and is now worth some £56 billion. But in a market facing pressures from all sides, the growing demand for overnight and early morning food and beverages consumed away from home is an important new source of growth. The overall OOH foodservice industry grew by 43 million additional visits in the two years ending May 2018. The overnight portion made up 83% of this growth, or some 36 million visits. This is a new trend that reflects the ability of Britain’s foodservice operators to make their assets work hard 24 hours a day and is partly supported by rapid growth in delivery.
London has provided much of the overnight momentum and now accounts for 26% of night-time traffic nationwide with over 67 million visits annually. The capital’s overnight foodservice market grew 38% in visits in the two years ending May 2018.
Large cities, especially in the north of England and in Scotland – including Liverpool, Manchester, Sheffield, Leeds, Newcastle, Glasgow and Edinbugh – are building night-time business with 20% average visit growth over the past two years. However, cities in Wales, the Midlands and the east of England – including Cardiff, Birmingham, Wolverhampton, Oxford, Cambridge and Norwich – are less successful between midnight and 7am having seen visits dip by -6% on average.
Dominic Allport, Insights Director with The NPD Group, said: “London is leading the overnight and early morning trend. The two-years of growth we have identified includes the period since the August 2016 start of London’s Night Tube operations, and the months since the announcement in July 2017 of Sadiq Khan’s 24-hour vision for London.
A huge variety of sectors routinely involve night work – including hotels and restaurants, arts and entertainment, media, transport, health and social work, wholesale and retail. People in these occupations want to visit foodservice outlets to buy food and beverages that they can consume away from home. Our data indicates the foodservice industry is contributing to London’s 24-hour economy. And we know from other foodservice trends that major cities will often follow London.”
Fast growth for quick-service and coffee
Britain’s QSR (quick-service restaurant) outlets are particularly successful in this new market. On a 24-hour basis, QSR brands grew visits by just under 3% over the two years ending May 2018. But in the overnight market, they have grown visits by nearly 27% over the same period – nine times faster. Foodservice operators selling coffee have seen visit growth of 36% against total market growth of 4% over the same period. An outlet selling coffee, that is open any time between midnight and 7am, is three times more likely to be visited during this overnight and early morning period, than during the rest of the day.
£1 billion and growing
The overnight OOH market is now worth close to £1.2bn, having broken the billion-pound consumer spend barrier in the 12 months to May 2018. The NPD Group says this fast-developing market segment could expand from the current level of 257 million visits annually to some 300 million visits by the end of 2020, to create a market potentially worth £1.5 billion.
Consumers are also much more likely to seek special promotions at night involving vouchers, discounts or meal deals. On any given day, around 28% of visits involve an offer or a promotion of some kind, while at night this jumps to 46%. But the bulk of the market is grab-and-go, accounting for 75% of night-time visits compared to the lower figure of 55% when measured across the full day.
Dominic Allport added: “Foodservice operators face many challenges, including Brexit-related labour issues, workplace pensions, inflation, higher business rates, new wage laws and declining retail footfall, driven partly by growth in online shopping. What we are seeing in London and other major cities is a welcome growth trend that can benefit many operators.”