UK Foodservice Market Sector 2021 - 2025

There has been a definite impact from the coronavirus outbreak on the overall foodservice business, with various segments being affected in varying degrees

Sector Forecast: UK Foodservice Growth Trends 2021-2026
Published 2021 - Report Highlights

The UK foodservice market sector is projected to register a CAGR of 3.02% during the forecast period, 2021-2025

The COVID-19 pandemic placed unprecedented stresses on food supply chains, with bottlenecks in farm labour, processing, transport, and logistics, as well as momentous shifts in demand. Lockdown resulted in the closure of all pubs, cafes, and restaurants across the country.

There were times during 2020/2021 when, the entire industry came to a staggering 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 GBP 10, purchased in restaurants, pubs, and cafes. Such factors are likely to change the market scenario in the coming years.

For the whole of 2021 the forecasts are that the industry will see a £10 bn fall in revenues, down to only £88 bn, 10% lower than in 2019. The long-term growth forecasts for the industry are that it will recover to 2019 levels by 2025 at the latest, as the economic impacts linger, but that it will eventually increase to £108bn by 2030.

Cautious consumers
Insight Report commissioned by leading chef Marcus Wareing showed that 34% of consumers expected to spend less when they returned to restaurants. These insights imply severe revenue decreases for operators. Consumers will also certainly have high expectations over the standards employed to keep them safe, and the value that they receive from the experience.







Changing consumption habits
In lockdown, there was an obvious switch from eating out to delivered services, despite some restaurants not opening for a while. This switch to, and increase in, food delivery from restaurants and kitchens has remained despite restaurants re-opening at the start of July, and is part of a long term trend of changing consumption habits. It is forecast for the long term that the share of stomach (out of c.90 total meals eaten each month) will change, with grocery losing share to eating out, delivery and an increase in snacking.

Offsetting losses

Financial modelling shows that despite decreasing headcount, reducing costs and maintaining margins (which will be harder with potential increases in supply chain costs), a restaurant operating on 50% normal sales plunges to a significant loss, and only a rent reduction, rates holiday and drastic salary cuts will enable many restaurants to break even. The VAT cut (from 20% to 5%) from July was not passed on to consumers in the majority of operations, other than some large-scale branded chains such as Costa Coffee and McDonald’s. Most operators kept pricing the same in order to benefit from the increased margin to help with cash flow.

Decline in consumer spending

At the end of 2020, and continuing in 2021, are the increases in unemployment and/or people working form home, factors which will drag down consumer discretionary spending, whether physically reduced, or through exercising more caution. All together, these economic effects will mean that many sites may not re-open, or potential they could fail before 2022 especially if a further lockdown is enforced during Q4 2021. 

Fast food best off

The new normality post-lockdown includes an expected reduction in travelling and commuting by public transport and more working from home, together with dramatic falls in in-bound tourism. As a result, certain sectors of the market will fare better, including fast food, which will steal share from service-led restaurants, due to their ability to provide takeaway, delivery and drive-thru services, as well as delivering intrinsic value.

If Covid-19 has taught us anything, it’s that the future cannot be predicted. But despite a rocky economic season, 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. 

The Future Of The UK Restaurant Industry

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, is positive for the future of consumer-business relationships and we predict 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. 

Read the full report
To access the full report or download please sign in to the members area.

Highly valued analysis & market intelligence
for your sector

Discover the latest market trends and uncover sources of future market growth for the UK Food Service industry with insight from the UK Food Council. 

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis and plan your corporate strategy with our expert qualitative analysis and growth projections. If you're in the Food Service industry, our research will save you time and money while empowering you to make informed, profitable decisions. 

In addition this report highlights how: 

Online Marketing Statistics For UK Restaurants 

It’s 2021, and online marketing has never been more important to businesses that rely on consumer engagement. Restaurants in the UK are no different, and gaining knowledge about how to go about strategising a solid online marketing plan is integral to success. 

  • Food and drink make up the bulk of what is posted on social media, being mentioned one third of the time across all platforms. 
  • Every nine days, there is more content uploaded to YouTube than the BBC has produced in the entirety of its television history. 
  • In 2018, the hashtag #food was posted to Instagram 260,819,245 times, and the hashtag #foodporn was posted 150,819,245 times. 
  • Up to 90% of consumers in the UK will research a restaurant before visiting – more than any other business type does. 
  • The global online food and restaurant industry cropped £280 billion in sales during 2020, emphasising the importance of functional and user-friendly online delivery options. 

Technology the QR thing

During 2020, the use of QR (Quick Response) codes became far more filtered into the mainstream restaurant market. Presently, over 84% of UK citizens have used a QR code to pay for a meal, establishing their presence as a staple in restaurant payment options. In 2020, as much as 48% of UK citizens are willing to exchange their data for more personalised services and options within the restaurant industry. Contactless payments made up 27% of the total payments made within the UK during 2020, the demand for cashless or contactless payments continues to grow. During 2020, the number of cash payments made fell by 35% overall. 40% of restaurant consumers report that they are comfortable dining out regardless of contactless payment options, but 56% of restaurant consumers say that such options are of importance to them. Almost two thirds of UK consumers say that they would rather dine out at restaurants with contactless or QR code payment options than those without.

UK Restaurant Economy Statistics 

The economic status of the UK has been dramatically influenced by Covid-19 and the nation is still reeling from lost profits. However, the government implemented schemes like Eat Out to Help Out, which proved stimulating to the industry’s economy. 

  • 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. 
  • In 2021, the UK restaurant sector is expected to rise by 32.1%, or £11.7 billion, respectively. 


General UK Restaurant Industry Statistics

How are restaurants holding up during this complicated historical time? These general restaurant industry statistics look at the key takeaway points of interest which have occurred between 2020 and 2021 in the UK. 

  • 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.