UK restaurant market to recover to 94% of 2019 value in 2022

The UK restaurant market is set to recover to 94% of its 2019 value in 2022, according to the new Lumina Intelligence UK Restaurant Market Report 2021/22. The report indicates that the UK restaurant market grew +25.9% or £2.3bn in 2021 to a total value of £11.2bn. Coronavirus restrictions in the first half of the year, including no dine-in trade until early April and outdoor only trade until late May, hampered recovery in the first six months of the year. Outlet decline continued in the market in 2021, at a rate of -2.8%, seeing a net loss of -817 sites. In 2022, the report predicts year-on-year growth of +59.4% or £6.6bn to a value of £17.8bn. Outlet decline in the market is expected to ease to -2.1% in 2022, impacted by continued decline in the independent segment. In contrast to the entire restaurant market, the top 10 branded restaurants by turnover are expected to achieve sales of £3bn in 2022, exceeding 2019 turnover. Leading branded restaurants are also forecast to add a net +56 sites in 2022, a +1.5% increase. Restaurant penetration was +69% higher in December 2021 than in December 2020, peaking in September with one in 10 consumers having a restaurant occasion each week. Restaurant penetration fell towards the end of 2021 with the spread of Omicron impacting consumer risk aversion. It also found that delivery share of occasions peaked at 56% yet the channel continues to account for almost one in three branded restaurant occasions. In addition, the report revealed consumers eat out in independent restaurants less frequently than branded restaurants, but when they do, they spend more. Average spend per person per visit for independent restaurants is £25.14, versus £21.59 for branded restaurants. Meanwhile, Lumina said that the UK restaurant market is forecast to see a compound annual growth rate (CAGR) of +1.0% from 2022F-25F, to see the market recover to £18.3bn. Restaurant outlet decline is expected to slow from 2022F-25F to a CAGR of -1.5%, up from -4.0% in 2019-22F. Blonnie Whist, insight director at Lumina Intelligence, said: “Unrestricted trading throughout 2022 is forecast to underpin recovery in turnover across the market. Falling case numbers will boost virus conscious consumer confidence in socialising out of home. “However, despite most wanting to move on from the pandemic, it is the pandemic-led trends that will continue to provide the biggest growth opportunities. Demand for delivery shows no sign of waning, menus are set to remain streamlined to manage rising costs, digital ordering and payment solutions will increase speed and satisfaction and outdoor dining will be a key development opportunity.”