Food For Thought: What’s happening in hospitality?

Despite the turbulent time faced by the hospitality industry, the hunger for eating out remains strong. Balancing inflation and finding new ways to thrive is leaving the hospitality industry with pockets of opportunities. So this week we’re looking at what’s growing in the sector and which hospitality consumer trends to jump on.

What’s growing?

It’s expected that market growth will be valued at £15.7bn in 2025 with the branded segment of casual dining leading the recovery. Restaurant closures are now on the decline too with 42 outlets closing a week in 2020, it’s expected that outlet numbers will instead be on the increase 2025.

Consumers were forced to get out the chef whites in 2020 if they wanted a food experience out of their norm, so now their expectation for eating out has changed. Consumers want specialised and differentiated food that they can’t make at home or buy on an M&S Dine In deal, demonstrating the increasing importance of restaurants.

Mowgli, the Indian street food chain is an example of outlet growth with five more opening in 2022. Mowgli’s performance isn’t just down to mouth-watering Chat Bombs and Bhel Puri (if you don’t know, get to know!), their growth is aligned with consumer demand for ethical consumption. Mowgli not only serve healthier vibrant world cuisine but commit to enriching the lives of their teams and the cities they serve in, having donated over £500k a year to a careful selection of charitable partners.

What do consumers want?

Consumers are price and value led now more than ever. We’ve also got consumers who wouldn’t usually be price conscious taking cost into consideration, with 75% of consumers aligning with this. Therefore, restaurants need to look at how they offer quality at value, considering expanding loyalty schemes and offers to encourage eating out.

Lunch-out is also growing, with hybrid workers making an occasion of their days in the office and treating themselves by grabbing lunch in a restaurant. The growth in the daytime occasion is demonstrated with more restaurants servicing the lunch market, typically dominated by the likes of Pizza Express. Wagamama have joined with Wagamama’s Box, as well as looking to offer corporate orders and catering offerings.

The lunch-out market also serves remote workers with some restaurants offering bottomless coffee and fast Wi-Fi for those who wish to use their outlets as a workspace, helping to drive daytime footfall.

How are vendors managing costs?

To serve the price and value led consumer, restaurants are consolidating their menus to help manage costs, as smaller teams take less training and are able to offer consistent quality dishes.

Main menu items also haven’t increased in price with inflation and have stayed relatively the same. This is because rather than increase the price of all items on the menu, lower the cost of a dish or keep the price the same, brands are introducing new exciting menu items which can be priced at £2 more than a typical dish. This combined with increasing the price of side dishes and starters by an average of £1.50 helps to ensure the quality doesn’t have to change and neither does the price of the main menu.

The cost of food is certainly impacting restaurants and many are opting for lower cost ingredients to avoid passing on price increases to the consumer, swapping out chicken breast for thigh and sirloin for rump for example. Tactics like premium starters or value add sides (such as loaded fries instead of normal fries) also increase spend as consumers make the occasion for a treat.

What are the biggest trends right now?

Robots! Whilst exhibiting at The Big Hospitality Show in September, we saw more than a few robots rolling the floor, telling jokes, singing and interacting with the consumer. Whilst they’re not going to overhaul our entire waiting staff, the focus around providing efficiency in healthcare, hospitals and care homes has proven very effective. So, we need to look at how they can assist current operations rather than take over.

Of course, we can’t consider trends without mentioning TikTok, the home of mega trends. TikTok themselves has opened the ‘TikTok Kitchen’ where they serve viral creations. To stay relevant and drive traffic, restaurants need to look at keeping up with these trends. Butter Board anyone?

 NPD, customisation and trends are just a handful of ways that restaurants can manage price increases. Additional upsells through size or additional ingredients allows the customer to customise their dish whilst the base menu still looks cheaper. New dishes are helping to futureproof the menus with increased prices that have less impact on price sensitive consumers. And whilst we don’t all need to invest in robots straight away, keeping an eye on your FYP on Tik Tok will certainly stop your menu from being left in 2022.