Branded operators are increasing their lunch share
But growing popularity of breakfast out threatens to cannibalise lunch trade
London, September 21 2016 – The competition to attract consumers for lunch out-of-home (OOH) has become more intense than ever. There is competition between branded operators and independents as well as added pressure for all players from the growing trend to spend money on OOH breakfasts, with this day part growing much faster than lunch.
Brands doing better than independents for lunch
With high-street restaurant chains having invested vigorously in their lunch products since the 2008/2009 downturn, the well-known branded foodservice chains are successfully building business at the expense of independent operators. Figures released by global information company The NPD Group show that as of YE June 2008, there were 13 chains with a 1%+ share of the OOH lunch market. By YE June 2016 this had grown to 17 chains.
Breakfast growing faster than lunch
NPD data shows that the average bill for eating an OOH breakfast is 31% higher (at £3.30) than it was eight years earlier. In contrast, the average bill for lunch is only 6.5% higher over the same period (£4.57 vs £4.29). While people still spend more at lunchtime, the gap is closing. As of YE 2008, the price of an eat-out breakfast was 59% that of lunch; fast forward to YE 2016 and it is 13 percentage points higher at 72% the price of lunch. It’s the same story when viewed in terms of visits. Since YE June 2008, lunch has lost over 80 million visits, while breakfast has added an extra 107 million. Dinner is flat.
NPD Group says that more people are having breakfast out because they don’t have the time to focus on that meal at home. Breakfast offerings on the high street – both food and drink – are also more numerous than before and offer wider choice. With operators opening much earlier too, breakfast out amounts to a much better option than anything we could prepare at home.
Cyril Lavenant, NPD’s Director of Foodservice UK, said: “Foodservice operators providing lunches of all kinds are working in an intensively competitive marketplace. The well-known brands are succeeding at the expense of independent operators. But the bigger story is that it’s easier than ever before to buy a good breakfast on the high street. In addition, some 16% of breakfast occasions away from home occur at the relatively late time of between 10am and 11am, meaning that lunch for some might then become just a quick bite of something light that people bring from home. In that case, they would skip buying their lunch from outside. So as breakfast away from home grows, especially if this happens later in the morning, there is a danger breakfast will cannibalise lunch business. That’s a trend foodservice operators should watch.”
Lunch is popular at weekends…
Lunch has declined during the week in visit terms but is seeing strong growth at weekends, with 8% more visits than eight years ago. Breakfast though is doing even better with over 20% more weekend visits. Meanwhile, lunch is increasingly relying on deals with a five percentage point increase in OOH lunch visits involving promotions and meal deals (from 23% of all OOH lunch visits YE June 2008 to 28% for YE June 2016).
…and lunch-on-the-go grew last year
Are we eating lunch where we buy it? For YE June 16 vs YE June 08, on-premise visits were up 5.8%, while off-premise (‘lunch on the go’) visits were down 6.3%. However, lunch on-the-go visits have recently picked up, increasing in the past year to June 2016 by 3.9% versus a slower growth of 1.7% for on-premise visits.
Meanwhile, our tastes for lunch purchased away from home are showing no evidence of change. Sandwiches or wraps are our food of choice, with one-third (33%) of all lunch visits including these items, much higher than burgers (15.9%) or chips/French fries (14%). Over 25% of visits involve the purchase of a carbonated soft drink. More than twice as many OOH lunch visits (15% vs 7%) involve coffee rather than tea.
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Note to Editors:
All data is from NPD CREST:
Eating out: the data is for the British ‘Out of Home’ (OOH) foodservice market, comprising:
- quick service restaurants (fast food)
- casual dining brands
- branded pubs and independent pubs
- full-service restaurants, Indian / Chinese restaurants and others serving ethnic dishes
- hotels, department stores, motorway services, bars, aeroplanes, trains, ferries/cruise ships
- supermarkets and department stores selling ‘food to go’
Visit: means 1 person visiting a foodservice establishment. A mother, father and two children would count as four visits.
Total eating out market: for year ending June 2016: 11.3 billion visits.
For more information, please contact:
The NPD Group
Cyril Lavenant, Director of Foodservice UK T: +44 (0) 20 8237 1305 +44 (0)7778 771121, or email email@example.com
About The NPD Group, Inc.
The NPD Group provides market information and business solutions that drive better decision-making and better results. The world’s leading brands rely on us to help them get the right products in the right places for the right people. Practice areas include apparel, appliances, automotive, beauty, consumer electronics, diamonds, e-commerce, entertainment, fashion accessories, food consumption, foodservice, footwear, home, mobile, office supplies, retail, sports, technology, toys, video games, and watches / jewelry. For more information, visit npd.com and npdgroupblog.com. Follow us on Twitter: @npdgroup