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Eating-out spend falls for first time

15 July 2009 by
Eating-out spend falls for first time

The amount spent on eating out of the home in the UK has fallen for the first time in 40 years as a result of a shift in consumer expectations that will continue after the recession, according to a new report commissioned by McDonald's.

The report, Eating Out in the UK 2009, produced by industry analysts Allegra Strategies, revealed the value of eating out would drop 0.5% from last year to £40.3b in 2009, with one in nine meals eaten away from the home in 2009, down from one in eight in 2008. This is the first time there has been a decline since the informal eating-out market emerged in the 1960s.

The report, which tracked the eating habits of thousands of consumers, found a major trend towards healthier eating, quality food and a demand for better service and value. It said operators would have to respond to the fact some 75% of respondents valued quality and taste of food above price and more than half (58%) preferred to eat food sourced from the UK.

The findings come in an extensive piece of research into the size of the informal eating-out market, which employs one in 25 of the UK workforce in the UK and includes pubs, fast-food restaurants, staff restaurants and coffee shops.

Steve Easterbrook, chief executive of McDonald's UK, commented: "For the first time in 40 years, the recession is taking a bite out of a market that is traditionally resilient to downturns. The British public is becoming ever-more discerning about the way they spend their money, and this is starting to affect the performance of the sector."

The report predicted that growth would return in 2010, with the market hitting £47.5b by 2014 thanks to rising trends in affluence, mobility, more youthful older customers and an Olympics boost in 2012.

However, it concluded that the new customer demands for quality and value for money would continue after recession and only businesses that can meet them would prosper in the future.

Steve Gotham, project director, Allegra Strategies, said: "The industry will have to become more consumer-focused as customers won't forget what they are learning in the recession. Eating out may have become an everyday experience, but when the economy picks up, people won't go back to paying over the odds for a meal."

A copy of the report can be obtained from Allegra Strategies.

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By Rosalind Mullen

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