Eating out spend to rise in 2013

Its annual review says that despite experiencing another year of negative growth, the country’s foodservice operators had coped well and had emerged in good shape for 2013 and the possibility of some growth in the market.

“The last few years have demonstrated that the majority of strong businesses survive, and that operators across all sectors and within the supply chain, have learned to cope. They have developed the systems, and mind-sets, that are effective in exceptionally tough times, and invested money in businesses that can actually deliver profit and growth,” said managing director Peter Backman.

Backman said lack of growth in the market during 2012 was fuelled by restrained consumer confidence, largely due to fears over unemployment. Horizons said low interest rates had also left consumers with less money in their pockets, which, together with intensive competition amongst foodservice operators, meant that people were becoming more choosey about where, and when, they ate out.

“The continued use of vouchers and money-off deals means that the battle for consumers continues, particularly amongst mid-spend, high street operators. Operators are also experiencing competition from the retail sector, where keenly priced meal deals are still popular,” he said.

While the Jubilee and Olympics did little to improve overall spending on eating out, Backman struck a positive tone.

“The overall position has been characterised by slow decline of the sector over the last few years – but we suspect that this has been a result of a certain amount of culling of inadequate operators. Some sort of bottom has now been reached or will be in early 2013. At some point during 2013 we expect consumer confidence to start returning and spend on eating out will start to rise again.”

Backman said the year ahead would be characterised by the continued need for operators, and suppliers, to attract consumers with innovation in terms of food offers and new service styles. This might include a return to all-you-can-eat buffet styles of service, he said.

Discounting will continue, said Backman, but he said operators will be careful about how they target offers and ensure the marketing behind them serves to build a stronger relationship with customers as well as maintaining their interest.