Convenience dominates food-to-go, but share ‘under threat’

Food to go

Exclusive new research from HIM and MCA suggests convenience will add £475m in food-to-go sales over the next three years – but will see its share of the market fall.

The burgeoning UK food-to-go (FTG) market will continue to outperform the total UK eating out market and grow 2.7% in 2020 to a value of £21.7bn, according to research from the MCA and HIM Food-to-go Market Report 2020. Within convenience retail, the sector is forecast to grow £475m over the next three years, from £6.2bn in 2019 to £6.7bn in 2023. However, this represents a fall in share of the total market: to 28.3% by 2023 as convenience retail fails to keep up with its FTG rivals.

The report, which was based on data that included 144,000 online surveys, reveals convenience retail remains the number one channel for lunch and snack occasions, but share is slipping at snack occasions – a daypart that is traditionally vital for convenience store retailers. Although still accounting for one third of snack visits, local retailers and supermarkets are losing share to coffee shops and cafés for this shopping occasion.

Blonnie Walsh, Head of Insight at MCA Insight & HIM says, “Convenience retail continues to be the biggest shareholder of the UK food-to-go market, highlighting strong demand from consumers and considerable growth opportunities for retailers – particularly with the £475m growth forecast over the next three years. However, frequency is declining and with participation arguably reaching its peak, retailers are under pressure to find ways of increasing spend to mitigate a drop in FTG footfall.”

“Value for money continues to grow in importance and is an area that is considered synonymous with convenience retail in the context of food-to-go. In particular, meal deals are the number one mechanic for promotions. However, foodservice specialists are using innovation and technology to improve their offer beyond the traditional meal deal that has remained a staple within a c-store offering.”

“Offering a wider variety of products within an FTG range is critical to success. Health has changed the landscape of FTG, with growth in vegetarian and vegan options, as well as other dietary requirements. In fact, 15% of FTG visitors have dietary requirements, so failure to offer a wider, more diverse range will see frequency continue to fall.”