UK Foodservice: The Future of Foodservice in the United Kingdom to 2019

FS0007MR

June 2015

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Executive Summary

Macro Economic Analysis and Trends Macroeconomic Analysis

Consumer Trends

Operator Trends

Technology Trends

Foodservice Market Attractiveness Market Size and Forecasts

Market Share split by Profit Sector and Cost Sector

Profit Sector Analysis Profit Sector Analysis by Channels & Sub-channels- Sales Analysis, Outlet Analysis and Transaction Analysis • Accommodation - Bed & Breakfast, Guest House, Holiday Park, Hostel, Hotel & Motel

• Leisure – Entertainment, Venue, Visitor Attraction

• Pub, Club & Bar – Pub & Bar, Private Member & Social Club, Nightclub

• Restaurants - Full Service Restaurant, Quick Service Restaurant & Fast Food, Coffee & Tea Shop, Ice Cream Vendor

• Retail – Baker, Convenience Store, Delicatessen, Department Store, Garden Centre, Other Retail, Service Station Forecourt, Supermarket & Hypermarket

• Travel – Air, Rail

• Workplace - Government Department & Local Authority, Industrial, Retail, Financial & Office Based

Cost Sector Analysis Cost Sector Analysis by Channels & Sub-channels-Sales Analysis, Outlet Analysis and Transaction Analysis • Education - Further Education, Secondary School, Tertiary, Training Centre

• Healthcare – Hospital, Medical Centre, Residential Care

• Military & Civil Defence - Military Overall, Police & Emergency Service

• Welfare & Service - Other Welfare & Service, Prison, Welfare Meal

Competitive Landscape Company Overview, Product Portfolio, Number of Outlets and Revenues

Regulatory Scenario

Appendix

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List of Figures

Figure 1: GDP per Capita, 2009-2014

Figure 2: Consumer Price Index, 2009-2014

Figure 3: Unemployment Rate, 2009-2014

Figure 4: Age Profile, 2014

Figure 5: UK Foodservice: Overall Sales (GBP Million) & Annual Growth (%), 2009-2019

Figure 6: UK Foodservice: Sales by Sector (%), 2014 vs. 2019

Figure 7: Comparative Growth Analysis by Channels, 2009-2014 vs 2014-2019

Figure 8: Profit Sector: Channel share (%), 2014 vs. 2019

Figure 9: Profit Sector: Average Transaction Price (GBP), 2009-2019

Figure 10: Profit Sector: Comparative Growth Analysis by Channels, 2009-2014 vs 2014-2019

Figure 11: Accommodation- Sales (GBP) and sales growth (%), 2009-2019

Figure 12: Leisure- Sales (GBP) and sales growth (%), 2009-2019

Figure 13: Pub, Club & Bar- Sales (GBP) and sales growth (%), 2009-2019

Figure 14: Restaurants - Sales (GBP) and sales growth (%), 2009-2019

Figure 15: Retail - Sales (GBP) and sales growth (%), 2009-2019

Figure 16: Travel - Sales (GBP) and sales growth (%), 2009-2019

Figure 17: Workplace - Sales (GBP) and sales growth (%), 2009-2019

Figure 18: Profit Sector: Comparative Growth Analysis by Channels, Sales per Outlet & Number of Outlets, 2009- 2014

vs 2014-2019

Figure 19: Accommodation - Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 20: Leisure - Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 21: Pub, Club, and Bar - Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 22: Restaurants – Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 23: Retail – Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 24: Workplace - Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 25: Profit Sector: Comparative Growth Analysis by Channels, Transactions per Outlet & Number of

Transactions, 2009- 2014 vs 2014-2019

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List of Figures

Figure 26: Accommodation - Transactions and Transactions per Outlet by Channel, 2009-2019

Figure 27: Leisure - Transactions and Transactions per Outlet by Channel, 2009-2019

Figure 28: Pub, Club, and Bar - Transactions and Transactions per Outlet by Channel, 2009-2019

Figure 29: Restaurants - Transactions and Transactions per Outlet by Channel, 2009-2019

Figure 30: Retail - Transactions and Transactions per Outlet by Channel, 2009-2019

Figure 31: Workplace - Transactions and Transactions per Outlet by Channel, 2009-2019

Figure 32: Cost Sector: Channel share (%), 2014 vs. 2019

Figure 33: Cost Sector: Average Transaction Price (GBP), 2009-2019

Figure 34: Cost Sector: Comparative Growth Analysis by Channels, 2009-2014 vs 2014-2019

Figure 35: Education- Sales (GBP) and sales growth (%), 2009-2019

Figure 36: Healthcare- Sales (GBP) and sales growth (%), 2009-2019

Figure 37: Military & Civil Defense - Sales (GBP) and sales growth (%), 2009-2019

Figure 38: Welfare & Services - Sales (GBP) and sales growth (%), 2009-2019

Figure 39: Cost Sector: Comparative Growth Analysis by Channels, Sales per Outlet & Number of Outlets, 2009- 2014

vs 2014-2019

Figure 40: Education - Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 41: Healthcare - Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 42: Military & Civil Defense - Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 43: Welfare & Services – Outlets and Sales per Outlet by Channel (GBP), 2009-2019

Figure 44: Cost Sector: Comparative Growth Analysis by Channels, Transactions per Outlet & Number of

Transactions, 2009- 2014 vs 2014-2019

Figure 45: Education- Transactions and Transactions per Outlet by Channel, 2009-2019

Figure 46: Healthcare - Transactions and Transactions per Outlet by Channel, 2009-2019

Figure 47: Welfare & Services - Transactions and Transactions per Outlet by Channel, 2009-2019

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List of Tables

Table 1: Leading Foodservice players in UK, 2014

Table 2: Profit Sector Outlets, 2009-2014

Table 3: Cost Sector Outlets, 2009-2014

Table 4: Profit Sector Transactions (Million), 2009-2014

Table 5: Cost Sector Transactions (Million), 2009-2014

Table 6: Profit Sector Sales (GBP Million), 2009-2014

Table 7: Cost Sector Sales (GBP Million), 2009-2014

Table 8: Key Foodservice Definitions

Table 9: Profit Sector Definitions

Table 10: Cost Sector Definitions

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Executive Summary

Overall Foodservice sector

Current market size (2014): GBPXX.X billion; Market size forecasts (2019): GBPXX.X billion; CAGR growth: XX.X%

Per capita sales: GBPXX.X

Sluggish economic recovery due to low productivity and high debt, affected the UK Foodservice market during 2009-

2014.

Cost Sector

As a % of Foodservice in 2014: XX.X%; CAGR growth: XX.X%; Largest channel in the cost sector: Education

Within the Cost Sector, the Education channel had the highest share of sales in 2014, at XX.X%.

Profit Sector

As a % of Foodservice in 2014: XX.X%; CAGR growth: XX.X%; Largest channel in the profit sector: Restaurants

Key trends in the UK Foodservice industry

Due to higher obesity rates in the UK, consumers are changing eating preferences from processed foods to local,

organic, and fresh foods..

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Macro-economic analysis: GDP per capita will benefit from rising consumer spending, supported by low inflation and rising wages

GDP Per Capita

Consumer Price Index

The UK’s GDP per capita (nominal) grew significantly, by

XX.X% in 2014. However, it fell by XX.X% in 2012 because

of maintenance delays in North Sea oil fields.

The consumer price index (CPI) was XX.X in 2014, up

XX.X% from the previous year.

Source: Timetric

100

105

110

115

120

2009 2010 2011 2012 2013 2014

Co

ns

um

er

Pri

ce In

de

x

-20%

-15%

-10%

-5%

0%

5%

10%

15%

0

10,000

20,000

30,000

40,000

2009 2010 2011 2012 2013 2014

An

nu

al G

row

th (%

)

GD

P P

er

Cap

ita (

GB

P)

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Consumer Trends: Higher obesity rates in the UK driving the trend of healthy eating

A shift towards healthy eating- UAE consumers are shifting their

eating preferences from processed foods to local, organic, and

fresh foods. According to a survey conducted by Canadean in

December 2014, a third of UK consumers want to eat and drink

more healthily in 2015.

Changing breakfast trends- Two major new trends related to

breakfast are emerging among the UK consumers:

• Growing trend of out-of-home breakfast- With increasingly

hectic lifestyles, more consumers are eating breakfast away

from home.

• Brinner, eating breakfast foods at dinner time- A trend that

first emerged in the US, the brinner trend is fast growing in the

UK.

Bacon Sandwich

Toast

Eggs

Sausage

Baked Beans

Top 5 out-of -home

breakfast foods in the UK

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The UK Foodservice industry grew at a CAGR of XX.X% during 2009-2014 and valued GBPXX.X million (US$XX.X

million) in 2014. Encouraged by falling unemployment rates and rising real wages, the UK Foodservice industry is

forecast to grow at a CAGR of XX.X% during 2014-2019.

The Profit sector accounted for the major share, at XX.X% of total Foodservice sales in 2014, and is forecast to grow

at a CAGR of XX.X% during 2014-2019.

Foodservice: Improving economy condition due to falling unemployment rate and increasing consumer spending will drive the foodservice market

UK Foodservice: Overall Sales (GBP

Million) & Annual Growth (%), 2009-2019

UK Foodservice: Sales by Sector (%),

2014 vs. 2019

2014

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

50,000

55,000

60,000

65,000

70,000

75,000

80,000

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

An

nu

al G

row

th (%

)

Fo

od

serv

ice S

ale

s in

GB

P M

illi

on

Profit

Cost

2019

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Sluggish economic recovery due to low productivity and high debt has affected the UK Foodservice market,

which grew marginally, at a CAGR of XX.X%, during 2009-2014.

The Restaurants and Pub, Club & Bar will remain the dominating channels

Bubble size = 2014 Sales -2%

1%

3%

5%

-2% 1% 3% 5%

Sale

s in

GB

P M

illio

n C

AG

R (

%)

2014

-2019

Sales in GBP Million CAGR (%) 2009-2014

Comparative growth analysis by channels, 2009-2014 vs. 2014-2019

Restaurants

Pub, club and bar

Accommodation

Leisure

Workplace

Education

Retail

Healthcare

Military & civil defense

Travel

Welfare & services

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Profit sector sales by channels: As the companies cut down on travel budgets, the demand for budget accommodation will witness significant growth

Accommodation- Sales (GBP) and sales growth (%)

Sales and Sales Growth by Channels, 2009-2019 (in GBP)

Leisure- Sales (GBP) and sales growth (%)

The inbound tourist spend is expected to

increase by XX.X% annually in 2015, which will

contribute to Accommodation Foodservice

sales, forecast to grow at a CAGR of XX.X%

during 2014-2019.

Leisure Foodservice sales are forecast to grow

at a CAGR of XX.X% during 2014-2019.

Entertainment is the largest sub-channel at

GBPXX.X million (US$XX.X million) sales in

2014, and is forecast to grow at a CAGR of

XX.X% during 2009-2014.

0%

1%

2%

3%

0

3,000

6,000

9,000

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

An

nu

al G

row

th (%

)

Sale

s (

in G

BP

Mil

lio

n)

Hotel & Motel Guest House Bed & Breakfast

Holiday Park Hostel % Annual Growth

0%

1%

2%

3%

4%

5%

0

1,000

2,000

3,000

4,000

5,000

6,000

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

An

nu

al G

row

th (%

)

Sale

s in

(G

BP

Mil

lio

n)

Entertainment Visitor Attraction Venue % Annual Growth

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Cost sector outlets by channels: Education channel will be registering highest sales per outlet during 2014-2019

Education - Outlets and Sales per Outlet by Channel (GBP)

Outlets and Sales per Outlet by Channel (in GBP)

The number of outlets for the Education channel

is forecast to grow at a CAGR of XX.X% during

2014-2019, while sales per outlet for the channel

is forecast to grow at a CAGR of XX.X% during

the same period.

Healthcare – Outlets and Sales per Outlet by Channel (GBP)

The number of outlets for the Healthcare channel

is forecast to grow at a CAGR of XX.X% during

2014-2019 while sales per outlet for the channel

are expected to grow at a CAGR of XX.X%

during the same period.

Bubble size = Number of Outlets 2014

-2%

1%

3%

5%

7%

-2% 1% 3% 5% 7%

Ou

tlets

by C

ha

nn

el C

AG

R (

%)

2014-2

019

Sales per Outlet by Channel CAGR (%) 2014-2019

Pre-School

Primary School

Secondary School

Further Education

Training Centre

Children's ActivityCentre

Tertiary

0%

1%

2%

3%

0% 1% 2% 3%

Ou

tlets

by C

ha

nn

el C

AG

R (

%)

2014-2

019

Sales per Outlet by Channel CAGR (%) 2014-2019

Medical Centre

ResidentialCare

Hospital

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Competitive Landscape – Key players

Leading Foodservice players in UK

Company Name 2014 Number

of Outlets

2014 Revenues in

GBP million Overview Product Portfolio

Whitbread XX.X XX.X

Whitbread is

a hotel, coffee

shop and restaurant

company

headquartered

in Dunstable, UK and

employs 45,000

people.

Popular brands include

Premier Inn, hub by

Premier Inn, Costa,

Brewers Fayre, Beefeater

Grill, Table Table and

Taybarns

Compass

Group

XX.X XX.X

Compass group is the

leading provider of

contract catering and

support services in

the UK and Ireland. It

has 10,000 client sites

across the UK and

Ireland and has

3million customers.

It provides catering

services to schools,

sports and leisure

venues, retirement

homes and workplace

Source: Company Websites & Secondary Research

Appendix - Profit Sector Outlets

Channel Sub-Channel 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Accommodation

Bed and Breakfasts

(B&B)

Guest Houses

Holiday Parks

Hostels

Hotels and Motels

Leisure

Entertainment

Venue

Visitor Attractions

Pubs, Clubs and

Bars

Pubs and Bars

Private Member and

Social Clubs

Nightclubs

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Market Data Methodology: Foodservice Market Data is created by the consistent application of robust research across all channels

Creating Robust, Consistent & Comparable Results through:

100% Standardized Definitions 100% Standardized Processes

Phasing work by channel by country Systematic Senior Management Review

1. Baselines Developed using Internal Research Resources

• Socio-economic and demographic databases

• Historic market databases and reports

• Company database and Foodservice database

2a. Industry Research:

Extensive Desk Research (Ongoing)

• Industry and trade research

• Reports published by international

organisations

• National statistics and other publically

available sources

• Expert Opinion: Collation of opinion

taken from journalist interviews of

leading industry figures

Top-down

cross-checks

Bottom-up

data creation

Data

Finalization

3. Marketing Modeling & Analyst

Triangulation

• Modeling of any gaps in data from

previous two research phases

• Consolidation and verification of inputs

for creation of models to benchmark

data across sectors and geographies

• Forecasting

• Triangulation and Conflict Resolution

• Review by Senior Project Managers

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Key Foodservice Definitions

Term Definition

Foodservice

Foodservice is defined as the cost of all food and drink, including on-trade drinks not drunk

with food, for immediate consumption on the premises or in designated eating areas shared

with other foodservice operators, or in the case of takeaway transactions, freshly prepared

food for immediate consumption. Foodservice is restricted to the sale of food and drink in

specific foodservice channels defined below and excludes vending machines.

Profit Sector

A number of foodservice channels have been grouped together to be termed the 'Profit

Sector’. These include Accommodation, Leisure, Restaurants, Retail, Travel, Workplace,

and Pubs, Clubs and Bars. Neither operators nor consumers, or companies in the case of

the Workplace channel, typically receive a subsidy for the foodservice transaction, and

largely represent non-state foodservice operations.

Cost Sector

A number of foodservice channels have been grouped together to be termed the 'Cost

Sector'. These include Healthcare, Education, Military and Civil Defense, and Welfare and

Services. This sector typically represents the state’s foodservice operations.

Food Transactions

The total number of visits by individuals to foodservice locations that involve the

consumption of either food, or food and drink. Drink-only transactions are excluded from

transaction data, but covered in sales data; if several people visit one location at once and

there is only one bill, such as a group dining in a restaurant, the number of transactions is

counted as being one for each person in the group. The concept of ‘meals’ is broadly

analogous to transaction data, less a typically very small amount for snack-only

transactions.

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About Canadean

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