The eating-out market’s future growth might depend heavily on the behaviour of young high-frequency diners and whether they continue their present habits, says David Martin who analyses the latest CGA Peach BrandTrack findings
Eating out is at consistently high levels, leaving scant headroom for growth. Everyone who could eat out does so—91% of the public in the past six months, our latest BrandTrack research shows.
This is in a market that has shown slow and steady, rather than strong or spectacular, growth since the downturn, despite the influx of openings. About 2,000 new chain and independent restaurants opened last year, according to CGA Outlet Index data. The potential for future market expansion rests partly on population growth but, more importantly, on increased frequency.
Currently 38% of adults eat out at least weekly. They range from 26% of those aged 55-plus to 57% of 25-34 year olds. Under-35s account for about one in six of all out-of-home diners, but we estimate they account for about 40% of eating-out occasions.
They are disproportionately likely to live in London or close to the other major city centres: some 13% of young high-frequency users live in London, compared with 7% of all those who eat out. Put another way, one in three out-of-home diners living in the capital are high-frequency under-35s. This metropolitan bias raises interesting questions about the future balance of the market between the city centres and the suburbs.
Spoilt for choice
Young high-frequency diners claim, on average, to consider eating at 15 brands—similar to infrequent under-35s who consider an average of 16 brands. While brand repertoires are bigger for the high-frequency group—on average using 9.6 brands in six months, compared with 7.4 for their low-frequency contemporaries—the key question is whether there is a notional ceiling to the number of brands consumers will consider, despite ever-increasing local choices. This raises the stakes for brands to tap into consumers’ consciousness given the pace of the branded market’s rollout.
High-frequency under-35s typically account for one in four of leading brands’ user profiles. But that figure is less than 20% for most of the big pub dining brands. For Itsu, Byron, Five Guys and Revolution, however, it is more than 40%.
These young, high-frequency consumers also show well-above average awareness and usage levels for emerging brands in the UK market such as Chipotle, Shake Shack, Honest Burger and Burger & Lobster. The better burger market looks to be well placed to grow if these consumers take their current habits with them as they age.
The market’s future growth may depend heavily on the behaviour of these currently young high-frequency diners but nothing can be assumed. While younger consumers are disproportionately active in eating out, they are also more likely to have meals delivered, and to buy “grab ‘n’ go” meals from food retailers.
Casual dining comeback?
Casual dining brands are enjoying a comeback relative to cheaper alternatives, it has been suggested, and evidence from our Coffer Peach Business Tracker has shown improvement in restaurant groups’ same-outlet trends.
But our consumer data shows the 75% of out-of-home diners who have used any restaurant brand is virtually unchanged from a year ago, although this ranges from 88% among under-35s, to 64% for those aged 55-plus.
More telling is a slight year-on-year decline in the proportion of casual diners who also claim to have eaten at pub restaurants, along with a marginal decline in the number of pub dining brands where they have eaten. Furthermore, the proportion of all out-of-home diners who visited any pub restaurant brand has slipped 2% in our current survey on a year ago to 60%. This decline seems to be focussed more among older, more upmarket consumers—and the pub dining market has historically been relatively more dependent on that older market: our research shows 37% of pub restaurant brand users are aged 55-plus compared with 30% of restaurant brand users.
It is too soon to call these shifts a meaningful long-term trend, but they are statistical signposts, and we shall continue to watch them.
Brits’ enthusiastic adoption of breakfast out of home has been timely, providing a pocket of dynamic growth. More brands are developing such an offer. One in five out-of-home diners visited at least one brand for breakfast in the six months before interview, our latest BrandTrack research across the brands we measure in detail, shows.
Their choice considerations are little different to any other dining occasion—led by price, convenience and quality of food. Diners were more likely to mention these attributes than speed of service, the availability of special offers or discounts.
It is important to realise this is not just the preserve of young adults: more than 40% of out-of-home breakfast diners are over 45—slightly more than the number of breakfasting under-35s. However, out-of-home breakfast participation rates peak at 31% among 25-34s, and are only 10% among over-65s.
Those who eat out most often are likely to opt for breakfast. Almost half the people who claim to eat out every or almost every day have visited at least one of our measured brands at breakfast.
Among the least frequent eaters out, the figure falls to fewer than one in 10. And while London has the highest participation—24% of out-of-home diners—in every region at least one in six diners has visited a measured brand at breakfast.
McDonald’s is still comfortably the biggest brand in this market, followed by Costa, Greggs, Wetherspoon and Starbucks. On average, 4% of a brand’s customers now claim to visit at breakfast, but note how Bill’s succeeds as an all-day player with one in nine of its customers using it at breakfast. But consumers’ favourite out-of-home place to visit for food or drink at breakfast are McDonalds, named by 12% of all out-of-home breakfasters, Wetherspoon, 11% and Greggs 6%.
The big breakfast brand apart from McDonald’s is Wetherspoon, which attracts one in six breakfast users and enjoys comparatively high preference levels: it is well set as this market evolves.
Brand and Deliver
We’ve observed for a while now that the eating out market is in a phase of “brand-to-brand” combat. But a home-and-away contest, where not only the big food retailers have a critical interest, but where the meal delivery services are making inroads, is unfolding.
Some 56% of out-of-home diners interviewed in our latest BrandTrack research said they had food delivered in the past six months, of which almost one in four said they had food delivered at least weekly. These were higher-income, younger people who eat out much more frequently than the average, and who are more likely than others to have children at home.
The dominant channel for ordering, used by 57% of delivery customers, remains a phone call despite the advance of mobile technology. Some 45% use a website and 18% a smartphone app. Websites are the most common ordering channel for the most frequent delivery users.
Delivery usages is highly age-related: more than 40% of delivery users are under 35. Three quarters of 18-24s and three quarters of students had a meal delivered in the past six months compared with one in four 65s and older.
Narrow this down to the specialist delivery services, as opposed to the leading pizza brands, and one in four diners has used any of the six main players, Deliverance, Deliveroo, Dine In, Hungry House, Just Eat—the leader—and Takeaway. com.
Just Eat not only dominates the specialist delivery channel, but our research suggests it has almost as many users over six months as Domino’s, the established dominant brand in the market, and more users than Pizza Hut or Papa John’s.
These specialist delivery brands have an even younger age profile than delivered meals in general—almost 60% of their users are under-35s and they predominate in London. But at least one in six out-of-home diners use them in all regions.
The role home delivery plays for high-frequency out-of-home diners will be a critical influence on market growth in future—it’s our market’s equivalent of online retailing, the future scale of which is unknown.
Latent potential remains for family-dining brands, notably to encourage more frequent eating out with children. About a fifth of adults surveyed for our latest BrandTrack research have children aged up to 10. Half eat out weekly with or without children but only one in five eats out with them every week.
Many high-frequency diners who have young children don’t eat out weekly with them and, typically those who do, do so mostly monthly or less frequently. About one in five adults ate out with children during the past six months at one of the brands we monitor. The most important guest consideration is a child-friendly atmosphere, which more than half of those who dine out with children mentioned and more than 60% of those with kids under five.
The biggest frustration when dining with children is slow service, which 28% of family diners mentioned. Brewers Fayre, Pizza Hut, and McDonald’s are the brands most reliant on meal occasions with children. TGI Friday’s, Hungry Horse, Pizza Express and KFC are close behind. At least 30% of diners at these brands who have children under 11 eat there with them.
The larger brands have the biggest family diner user bases. McDonald’s leads by a distance. However, brand usage between ABC1s and C2DEs vary: Pizza Express and Nando’s are more likely to be used for family dining by ABC1 customers and McDonald’s is much more dominant among the C2DE market.
Among ABC1s who eat out with children, there is a greater likelihood of the occasion being just an “everyday meal” and consequently frequency is a little higher: one in five eat out with children at least weekly. About one in five family diners said McDonald’s was their favourite place to eat out with their children—three times as many mentions as the next most mentioned brand, Pizza Hut.
Top 10 brands for under 35s
% of this group that eats there
Burger King 37%
Pizza Hut 31%
Brands most dependent on under 35s
% of all brand’s customers
Five Guys 50%
YO! Sushi 38%
Flaming Grill 38%
Caffe Ritazza 36%
Brands most dependent on breakfast
% of all brand’s customers claiming to use for breakfast in the past six months
Little Chef 16%
Pret a Manger 9%
Caffe Nero 9%
Upper Crust 9%
Lloyds No 1 9%
Brand usage with kids
% visiting with children under 11
Brewers Fayre 36%
Pizza Hut 36%
TGI Friday’s 33%
Hungry Horse 30%
Pizza Express 30%
Frankie & Benny’s 29%
How CGA Peach BrandTrack rankings work
Every three months CGA Peach BrandTrack surveys about 5,000 GB adults who eat out—with the sample weighted to reflect the make-up and balance of the general population. Data from these tables comes from the most recent April 2015 round asking consumers a wide range of questions about their eating and drinking out habits and specifically their attitudes to the 60 most used brands in the sector. Questioning took place from 23 April to 1 May. Many leading brand owners already use the data to benchmark their performance against competitors. To discuss consultancy services, bespoke brand analyses or to obtain a full pack of key league tables contact Jamie Campbell at CGA Peach, email Jamie.firstname.lastname@example.org.