Supply chain ยท 4 April 2018

Restaurant-shunning millennials could cost UK catering industry ?1bn

catering sector
Restaurants could see annual visits from younger consumers reduced by 155m by 2022
Millennials preferring to eat at home than go out could cost the UK?s catering industry close to ?1bn in lost revenue over the next four years, according to a new report.

However, the ?The Future of Foodservice? study, from the NPD Group, suggested that restaurant and caf? owners could compensate for the loss by targeting the more adventurous over 50s.

The report said so-called out of home visits (OOH) in the foodservice industry by people aged between 25 and 34 would decrease from 20 per cent to around 18 per cent of the sector?s total of 11.5bn visits between today and 2022.

That is equivalent to 155m fewer visits annually and a potential loss in annual spend of up to ?800m. NPD said this would represent another strong visit decline after a big drop between 2007 and 2012 in the same age group.

Foodservice operators should make up for this by targeting people aged over-50. NPD said this fast-growing demographic will account for more than 70 per cent of the growth in the country?s population between now and 2022.

It said this was an ?attractive proposition? for UK hospitality, especially as many over 50s are wealthier, more active and more experimental when eating out than previous generations.

Indeed, total OOH visits among those over 50 could rise by over four per cent by 2022, equivalent to 130m visits, three times faster than the total OOH market.

The average bill for the 50-to-64 age group at a full-service restaurant is ?13.41, higher than any of the other age bands, including 25-to-34s. The over 65s have the second highest average spend at ?13.10.



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The over 50s also currently account for 14 per cent of all delivery visits, expected to increase to 17 per cent by 2022. While the over 50s currently only account for 8 per cent of delivery via apps, the NPD Group believes this will increase rapidly as older consumers become more app savvy.

?Foodservice operators seeking growth in the next five years should be aware that business coming from the 25-to-34 age band, which includes many ?millennials?, is likely to drop. Visits from this age group have been dropping since 2007,? said Cyril Lavenant, foodservice director UK at the NPD Group.

?One reason is that millennials typically need new experiences and sources of inspiration that the foodservice industry does not necessarily provide.

?The 25-to-34s are also facing higher living costs than ever, especially in housing and childcare, and this is prompting them to cut back on foodservice purchases. Operators and suppliers will have to work hard to determine what could bring the 25-to-34s back to the market.”

The NPD said the industry could expand home delivery for the over 50s. Menus could offer more low-GI foods, including many fruits and vegetables and beans and do more to assist diabetics or those who are watching their cholesterol.

Lavenant added: “But now is also the right time to think more about the needs of the over 50s. There are huge differences in levels of fitness, mobility and prosperity as people move beyond 50 and into their 60s and 70s. But this is still a big opportunity for the foodservice industry.?

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