Big growth predicted for food-to-go

The UK food-to-go market is forecast to be worth £23.4bn by 2027, 26 per cent more than pre-pandemic levels.

That’s according to new analysis from IGD, which stressed that while inflation is set to be the main driver of growth, operators and retailers have an opportunity to support consumers through the cost-of-living crisis as they look to save money.

This year, the UK food-to-go channel will be worth some £18.9bn, three per cent more than its pre-Covid value in 2019. The market has performed better than predicted since the pandemic, IGD said, but this will slow by the end of the year and throughout 2023 as consumers battle rising energy, fuel and food costs.

“Foodservice businesses were the biggest beneficiaries of pent-up demand for food on-the-go last year because of all the innovation they put into working around lockdowns, such as flexible delivery solutions and click and collect offers,” said Nicola Knight, senior analyst for food-to-go and author of the report.

”But as the cost-of living-crisis comes in these operators will be under pressure as they become more of a premium option compared with lower priced food-to-go alternatives from a retailer, or preparing food at home.”

Inflation will be the main driver of growth over the next 18 months, Knight stressed, but while food-to-go has performed strongly this is expected to change as the true impact of rising prices kicks in during the last quarter and takes hold next year. Inflation will therefore boost market value but volumes are expected to stay the same in 2023.

Value focus for retailers

With the focus back on value for at least the next 18 months, retailers are in a strong position, IGD believes. The price point, range and execution of meal deals will become fiercely competitive, as they aim to capitalise on the opportunity.

“During the pandemic, retailers deprioritised food-to-go space in favour of in-demand categories, leaving them on the competitive back foot as footfall returned and consumers sought a change from homemade meals,” Knight said. ”However, if they can get their price, offer and format right, by 2027 retail could more than regain the share lost to foodservice operators during the pandemic to claim 23.7 per cent of the food-to-go market, compared with 22.9 per cent in 2019 and 20 per cent in 2020/21.

“Key opportunities for retailers over the next 18 months will include strengthening their meal deal offers as consumers become more value-led, and utilising customer data to create tailored offers that are relevant and savings-focused. There’s also an opportunity for them to increase food-to-go ranges to meet consumer needs across a wider variety of meal occasions.”