The Impact of Diners Tightening Their Belts

Study shows amount we spend on eating out has fallen for first time in 40 years

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The amount we spend on eating out has fallen for the first time in 40 years according to a report published this week.

The study, carried out by Allegra Strategies, estimated that the Informal Eating Out sector, which employs one in 25 people in the country, is expected to make £40.3bn in 2009, a fall of 0.5% from last year. This is the first time there has been a decline in 40 years.

The study is the largest ever carry out on the sizeable market which comprises informal restaurants, pubs, fast food and takeaways, coffee shops & cafés, sandwich bars, workplace canteens, retail grab & go offers, leisure venues and travel locations. It covers all meal occasion purchases of less than £15 per head consumed out of the home.

The report is the first snapshot of the impact of the recession on the market and consumer behaviour. It reveals that the amount of spending on eating out has fallen for the first time in 40 years – contrary to the popular view that the sector is booming as customers trade down from more expensive dining options.

The report finds that habits learnt in this recession will be long lasting. Only businesses that can meet the demand for value and quality in both food and service will prosper when the medium-long term growth in eating out returns.

The report was sponsored by McDonald’s with the aim of raising understanding of the size and importance of this market sector – both in terms of the wider economy and employment. Steve Easterbrook, chief executive of McDonald's UK, said, “For the first time in 40 years, the recession is taking a bite out of a market which is traditionally resilient to downturns. The British public is becoming ever more discerning about the way they spend their money, and this is starting to affect the performance of the sector.”

July 17, 2009