As concerns over Brexit mounted in 2018, consumer spending on the UK’s high streets was anything but ‘strong and stable’. And across the dining sector, down-sizing and deep discounting dominated the headlines.
But while consumers spent cautiously on the UK’s high street, their appetite for apps, speed and convenience allowed the delivery economy to emerge as the overall success story last year.
With overall spend up almost 20% from 2017, delivery services almost single-handedly drove growth in the dining sector.
In 2018 alone, Just Eat surpassed 400 million orders in the UK while Domino’s recorded its largest ever sales day in the UK– so there’s no doubt that the meteoric rise of the delivery economy will continue. In fact, the average spend per order on delivery services bucked the broader sector trend and even outpaced traditional restaurants, rising to an all-time high of £20.56 in 2018, compared with a steady decline to just under £20 for physical restaurants.
Appetite for Apps
Hungry app users continue to be attracted by the convenience of choosing and paying for their food from the comfort of their sofa. This popularity of delivery apps hasn’t gone unnoticed by traditional food-to-go brands, who are taking heed and responding by innovating their service models.
In 2018, McDonald’s and Greggs introduced their own click-and-collect apps to optimise speed and convenience for walk-in customers. The success of brands such as Deliveroo, Just Eat and UberEats isn’t just down to their customer experience offer. They also have an advantage over traditional food chains, given their endless options to choose from. It’s the equivalent of the eating-out industry’s Amazon effect.
Delivery platforms have seen that the traditional takeaway, like pizza and Chinese, has evolved to a point where consumers are instead ordering gourmet health foods, deserts, coffees - and in some cases Michelin star meals - at the click of a button.
This shift toward healthier preferences is being driven primarily by the younger consumer, aged 19-28, which has helped lunch brands like Leon and Pret a Manger grow in popularity with spend on salads, soups and sandwiches, up 5% last year.
While many attribute the rise of delivery services to Millennials and Gen Z’s, the surivial of the model may well hang on its appeal with older consumers having deeper pockets. In fact, those aged 49-58 spent on average £2.50 more per order in 2018 than the 19-28-year-olds.
Which trends will continue?
As consumers increasingly opt for eating-in over dining-out, it’s no secret that traditional brick-and-mortar restaurants are feeling the pressure. But it’s not all doom and gloom for restaurants, particularly those who offer delivery services and healthier menu items.
Facing the headwinds by embracing these platforms, as well as consumer taste trends, could well pay dividends. What’s more, tapping into areas like door-to-door delivery and click-and-collect, a desire for healthier choices and other new marketing platforms could be the recipe for success in 2019.