Supply chain · 4 December 2018

Restaurants handed boost as food delivery sector set to grow to £5bn in 2019

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Aggregators such as Deliveroo, Just Eat and Uber Eats will reap even greater rewards

Cocooning Brits are going to eat more food at home next year, according to new figures, providing a boon for restaurants and delivery firms.

Global information company the NPD Group has been looking into its crystal ball and finding new trends that will shape the UK’s out-of-home foodservice industry in 2019.

It said people will “cocoon” themselves indoors and eat more meals at home to save money with spend on restaurant food delivery expected to grow by 10% next year to £5billion.

NPD said aggregators such as Deliveroo, Just Eat and Uber Eats will reap greater rewards through subscription and loyalty programmes with food service brands likely to partner with in-home entertainment providers.

Operators will also have to respond to greater calls for transparency and trust in the food on their menus. This is due to increased concern over the impact of raw materials such as palm oil and more awareness of nutrition.

“Consumers will ask questions about the food they are buying. The best operators will provide the answers and address consumer concerns about single-use items, especially those made of plastic,” the NPD said.

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It also predicts that demand for vegan and vegetarian meals will grow and that operators who have failed to adapt because they see it as a short-term fad need to reassess. “The winners will need to respond carefully, ensuring they provide a balanced menu with the right choices for vegans and vegetarians while not alienating meat-eaters,” the NPD said.

Virtual restaurants will also do well. These are usually run from ‘dark kitchens’ owned by the aggregators such as Deliveroo, Just Eat and Uber Eats.

“While they often trade from an industrial estate rather than a traditional retail location, virtual restaurants can also be run from under-used conventional restaurant premises,” the report stated.

“A core appeal is that virtual restaurants can begin trading quickly, are relatively cheap to run and are flexible, aided by a lack of overheads such as dedicated retail premises and waiting staff.”

Deliveroo has around 400 virtual restaurants and Uber Eats aims for a similar number by the end of 2018.

Dominic Allport, insights director with The NPD Group, said: “While Britain’s foodservice industry is grappling with all sorts of cost pressures, it is showing that it can recognize and address a host of new trends. Britain’s delivery market will see a new phase in 2019. As consumers eat more meals at home, they’ll have more complex requirements, and this will strengthen the role of delivery aggregators.”

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