Global information company The NPD Group is predicting a decrease in eat-out or out-of-home (OOH) visits by consumers aged 25-to-34 between now and 2022.
In its new report, The Future of Foodservice: Great Britain 2022, it suggests 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, a drop of two percentage points.
This is equivalent to 155 million fewer visits annually and a potential loss in annual spend of up to £800m. This would represent another strong visit decline after the big drop between 2007 and 2012 in the same age group.
However, the firm suggested that Britain’s foodservice operators could compensate the loss 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 ONS.
It is predicted that 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.
Cyril Lavenant, foodservice director UK at the NPD Group, said: “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.
“Operators and suppliers will have to work hard to determine what could bring the 25 to 34s back to the market. But now is also the right time to think more about the needs of the over 50s. 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.”
Cyril 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.”
Big spenders and weekenders
As well as an increase in visits, over 50s are 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, including 25 to 34s. The over 65s have the second highest average spend at £13.10. Older customers will also sustain weekend business. The NPD Group says the over 50s will drive more than half of an expected 14% increase in weekend foodservice traffic by 2022, and eventually account for 29% of weekend visits.
Over 50s to boost delivery boom
Britain’s over 50s is expected to strengthen the delivery boom, in which customers order food by phone, online or via apps. The over 50s currently account for 14% of all delivery visits and this will increase three percentage points by 2022 to 17%. While the over 50s currently only account for 8% of delivery via apps, the NPD Group believes this will increase rapidly as older consumers become more app savvy. The NPD Group says the industry can expand home delivery for the over 50s, especially if operators innovate with lighter food options.
Closing the frequency gap
The firm also suggested that foodservice operators needed to close the ‘frequency gap’ between young and old. Consumers aged 35 to 49 will be visiting OOH foodservice operators more than 253 times a year by 2022, buying anything from an afternoon snack or a lunchtime sandwich at work to a sit-down restaurant meal in the evening. This is a high frequency – more than 1.5 times the visit frequency of the 50 to 64 age group (166 yearly visits per capita in 2022), and 3.5 times the frequency of the over 65s (73 visits per capita predicted for 2022). The foodservice industry can build business by narrowing that gap.