Higher living costs prompting ‘millennial’ age group to cut back, while dining out is on the rise for over 50s
Foodservice operators in Britain look set to see a decrease in business, worth around £800 million, as 25-to-34-year-olds curb their eating out habits. That’s according to the NPD Group’s new report ‘The Future of Foodservice: Great Britain 2022.’
The global information company is predicting a decline in eat-out or out-of-home (OOH) visits by consumers in that age demographic between now and 2022.
The report says OOH visits in Britain’s foodservice industry among this age group will decrease from 20% to around 18% of the industry total of 11.5 billion visits. The drop of two percentage points is equivalent to 155 million fewer visits annually and a potential loss in annual spend of up to £800 million.
The forecasted decrease is not the first big drop in recent years in this age bracket. 2007-2012 saw a strong decline in the same group.
Cyril Lavenant, Foodservice Director UK at The NPD Group, says higher living costs mean budgets are being stretched and cut backs are being made.
“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. 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.”
While the number of ‘millennials’ eating away from home looks set to dip, there is a brighter outlook for a different age group.
The report says Britain’s foodservice operators can compensate by targeting the over 50s. The fast-growing demographic will account for more than 70% of the growth in the country’s population between now and 2022 according to the Office of National Statistics.
It says many over 50s are wealthier, more active and more experimental when eating out than previous generations, making them an attractive proposition for the British foodservice. It predicts the total OOH visits among people aged 50+ could increase by more than 4% by 2022 (130 million visits), three times faster than the total OOH market.
Lavenant continues: “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.”
While the figures predict the over 50s will account for more visits, they are already the biggest spenders when it comes to eating out. 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. What’s more, the UK’s 50+ group will also strengthen the delivery boom, in which customers order food by phone, online or via apps.
They currently account for 14% of all delivery visits and this will increase three percentage points by 2022 to 17%.
Lavenant added: “Balancing lower eat-out business among 25-to-34s in the next five years with more business from the over 50s will be a challenge. But Britain’s foodservice operators have the skills to address this. Brands and advertisers in many industries are beginning to make the over 50s more of a priority and the foodservice industry should do the same.”