The latest insights from Lumina Intelligence’s Operator Data Index reveal a promising outlook for the UK’s eating out market in 2024.
Falling inflation is set to ease pressure on business margins and consumer wallets, with average earnings expected to outpace inflation for the first time in two years. A stabilising economy is poised to reinvigorate the sector, fostering greater demand for food and drink experiences outside the home following a period of constrained spending.
Consumer confidence has gradually returned to near pre-pandemic levels, settling at -13 in August. This rebound is driven by falling inflation, mortgage-friendly interest rate cuts, and increased political stability following the general election.
Despite these positives, lingering uncertainty about the broader UK economy has caused consumer confidence to stagnate.
The restaurant market is forecast to grow by +1.4% in 2024, though this remains slightly behind the total eating out market’s projected growth of +2.8%. Strategic restructuring among restaurants and cautious consumer spending are likely to temper further gains.
In contrast, premium brands like Dishoom, The Ivy, and Miller & Carter continue to thrive due to their focus on high quality offerings, with fast-growing brands such as Yard Sale, Rudy’s, and Slim Chickens capitalising on consumer preferences for specialised offerings and strong community engagement.
In the branded contemporary fast-food market, turnover growth of +14.9% is expected in 2024, fuelled by physical expansion from brands including Five Guys, German Doner Kebab, and Popeyes. This surge is supported by the success of franchise models and increased presence in key travel hubs.
The UK pub and bar sector is forecast to grow by +1.5% in value in 2024, benefiting from easing inflation and major sporting events. However, challenges remain, with a projected -0.9% decline in outlets due to strategic disposals of underperforming sites and rising business costs. The top 10 operators are forecast to achieve +4.2% growth in 2024F driven by market leader The Lounges and the success of experiential concepts are predicted to lead turnover growth in the coming year.
In the coffee and sandwich sector, leading brands are set to achieve +2.8% outlet growth in 2024. Costa and Greggs continue to drive efficiency through tech integration and supply chain improvements, while brands such as Grind and WH Smith focus on expansion into travel spaces through format innovation and strategic partnerships.
