The UK foodservice sector is highly competitive, owing to the number of small independent players and the large multi-national chains dominating the market. 

Foodservice Sector: Overview & News

The quest for margin growth - post 2020/21 pandemic

The UK foodservice market is projected to register a compund annual growth rate of 3.5% during the forecast period, 2021-2025.

The Covid19 Era
The coronavirus outbreak had a definitive effect on the overall foodservice business, with various segments being affected in varying degrees.

The COVID-19 pandemic created unprecedented stresses on food supply chains, with bottlenecks in farm labour, processing, transport, and logistics, as well as momentous shifts in demand, many of these challenges continue and will do for some time to come and may need constant government intervention.

A Challenging Landscape
Lockdown resulted in the closure of all pubs, cafes, and restaurants across the country. During this time, the entire industry came to a complete halt; however, some restaurants remained open for delivery and takeaway. To address the lockdown hit to the industry, the UK government implemented an initiative to help the restaurant industry, the Eat Out to Help Out scheme, in August 2020, following the first COVID-19 lockdown. During the month of August, diners in participating restaurants received a 50% discount on food items, up to £10, purchased in restaurants, pubs, and cafes. Such factors are likely to change the market scenario in the coming years.


Eating Out

British consumers dine out more frequently, as solo dining is one of the ongoing trends, reflecting the busy and hectic lifestyle of consumers. Just five years ago, the restaurant booking site, OpenTable, claimed that the number of bookings for dinners-for-one increased by 110% over the previous two years. The foodservice operators are benefiting from a dynamic and expanding corporate sector in areas like full-service dining, among other sectors.

The increasing frequency of restaurants offering various ethnic foods, such as Asian, American, Chinese, Japanese, and Thai cuisines, is the major factor driving the market in independent outlets among consumers. Furthermore, the increasing number of quick-service restaurants, such as KFC, McDonald’s, Pizza Hut, Domino’s, and others, have captured maximum consumer attention from consumers looking for convenience in their everyday meal requirements.​

Restaurants and Technology

In addition to the changes brought about by the Covid-19 pandemic, the technology industry is also evolving at a rapid pace. Restaurants may revolve around good quality food and service, but technology also plays a significant role in the food and hospitality industries – via payment methods, websites, QR codes, menus, mobile-app delivery services and even simple robots.

UK Foodservice Releases:
This is a snapshot of the latest food, news and research for the foodservice sector.
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Sept 2021:

The UK pub and bar market is set to recover to 64% of its pre-pandemic value in 2021 to £14.8bn

UK Govt promises to engage with and listen to hospitality sector - business minister Paul Scully MP has promised that the Government will continue to listen and engage with the sector


August 2021

FPI predictions of further sector inflation in the months ahead and highlights operators’ need for help from suppliers.


Restaurant Segment Snapshot

These restaurant segment statistics highlight points of interest which have occurred between 2020 and 2021 in the UK.

Some of the key players in the market are McDonald’s, Starbucks Coffee Company, Domino's, Whitbread PLC, and Yum! Brands. Major players are embarking on market expansions and innovations in terms of online delivery of foodservice to achieve consolidation while optimizing their offerings and increasing their market shares.

Over the course of the pandemic, the restaurant and hospitality industry adapted well to the changing rules, as the proportion of temporarily closing businesses plummeted from 81% in the 2020 lockdown to just 54% in the 2021 lockdown.
There are 42,070 full-service operating restaurants within the UK.
The food and drink industry within the UK provides formal employment for 487,848 individuals.
Low business confidence is expected, with 27% of multi-site restaurant owners fearing their business will be “unviable” by mid-2021.
The economic turnover in 2020 was £1.2 billion, compared to the much larger £6.9 billion from May 2021 (highest it has been since August 2020).
The restaurant industry turnover of 2021 (so far) is still 25% lower than that of 2019.
The turnover in May 2021 is five and a half times higher than it was in May 2020.
Restaurant bookings in May 2021 (just after restrictions lifted) soared up to 32% higher than the pre-pandemic May 2019.

The UK Economy & the Foodservice sector:

After the lockdown softened in July 2020, UK restaurants were much slower to recover than pubs, with 36% vs. 94% reopening respectively.
The trading conditions of total restaurant sales in the UK dropped by 64.9% in 2020.
The Bank of England claims that UK households potentially saved £100 billion in consumer costs over the course of the pandemic, implying there could be a massive surge of interest in restaurant activities once all restrictions are lifted.
The UK government’s Eat Out to Help Out plan successfully brought pubs, bars, and restaurant groups back to their 2019 levels.
Prior to the pandemic outbreak, January 2020 promised a fruitful year as the profit level of restaurants and bars was 4.7% higher than in January 2019.
The full closure of restaurants and bars in November 2020 saw profits plummet by 43.7% as compared to November 2019.
Due to volatile trading during 2020, data on UK restaurants and bars between April and July of 2020 is not available to the public.
In 2021, the UK restaurant sector is expected to rise by 32.1%, or £11.7 billion, respectively.

Foodservice defines those businesses, institutions, and companies responsible for any meal prepared outside the home. The United Kingdom foodservice market is segmented by type and structure. By type, the market is segmented into full-service restaurants, quick-service restaurants, street stalls and kiosks, cafes and bars, and 100% home delivery restaurants. By structure, the market is segmented into independent and chained. Cafes and bars is the dominant segment due to the country’s strong café culture, which has resulted in an increasing number of cafes and bars. This trend is expected to continue.

How will this sector develop in 2022 and beyond

If Covid-19 has taught us anything, it’s that the future cannot be predicted. But despite a rocky economic patch, the UK restaurant industry’s future is not all doom and gloom. With delivery services keeping businesses afloat and creative dining approaches becoming more popularised, there are plenty of new and exciting trends expected to take place over the next few years that the food and drink industry can look forward to accommodating.

In 2021 and 2022, the gradual but steady easing of lockdown restrictions is expected to boost revenue within the UK restaurant industry.
Plant-based food chains have continued to perform well in the UK, and are likely to remain in demand for the upcoming future.
At-home fine dining (DIY meal kits, picnic-style baskets etc.) is likely to be a common feature, where consumers can order food to be brought home and prepared by the consumers themselves.
Functional, attractive, and mobile-friendly websites will become the biggest ambassadors for restaurants and other business types
Outdoor dining is also likely to attract customers, as there is less concern around viral infections being shared in confined indoor spaces.
• Consumer desires to spend should see an uptick as Covid-19 fades, with a significant percentage of their disposable income will go towards the hospitality industry.
In 2021 and beyond, locally-sourced produce is going to be of more significance than before due to disrupted mega supply chains and a general desire from the community to keep things local.

Looking to the future

While nobody can say for certain what the future will hold, what we do know is that it will come with both new challenges and new rewards. So far, 2021 has been a year of major adjustment, and we can expect this period of change and flexibility to continue for the next few years.

However, despite the many changes and challenges that the UK restaurant and hospitality industry do face, many experts maintain a positive outlook for the future of consumer-business relationships and believe that the economy will repair over time.

Technology, contactless payments, high-engagement websites and social media presences, superior delivery services and of course, high quality products are expected to spearhead the future of the food and drink industry—not just within the UK, but for the world as a whole.


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