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Online Sales Sizzle For UK Fast-Food and Home-Delivery Outlets Industry

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Online Sales Sizzle For UK Fast-Food and Home-Delivery Outlets Industry

Online Sales Sizzle For UK Fast-Food and Home-Delivery Outlets Industry
October 10
10:52 2013

According to ‘Fast-Food and Home-Delivery Outlets’, a new Market Update from market intelligence provider Key Note, the UK industry rose in value by 2.5% in 2012. Growth was driven by the convenience that the market offers, as well as menu innovation and promotions.

The fast-food and home-delivery outlets market forms part of the wider restaurants industry. It is the largest category within the sector and is dominated by US chains, such as McDonald’s, Domino’s Pizza and KFC. Independent operators are also included in the analysis. The market is divided into six main segments.

The largest category is sandwiches, which account for nearly a third of the total market. Urban professionals are playing a critical role in maintaining sector dynamism for sandwiches. Moreover, fast food is synonymous with burgers, which make up over a fifth of the market. However, sector growth has slowed in recent times as it faces growing competition from other categories, particularly pizza, chicken and other fast-food and takeaway outlets. This is in part because burger chains are associated with poor quality and junk food. The fish and chips sector has also struggled as dishes within this sector are also considered to be unhealthy. Moreover, a major source of income for the category has traditionally been late-night sales, but Britons are going out less often to save money during the economic crisis. Furthermore, many businesses in the sector are small, independent operators who have been unable to cope with rising operating costs and falling sales.

The top-performing categories in the market in 2012 were pizza, chicken and other fast-food and home-delivery outlets. The pizza sector is benefitting from the growth of online sales, which are being spearheaded by sector leader Domino’s Pizza. Promotions have also played an important role in the sector’s growth.

In addition, chicken is perceived to be a healthier alternative to red meat. As a result, there is a growing demand for this type of product as consumers seek to lead a balanced lifestyle. Moreover, companies are hoping to improve their health credentials by developing more nutritious ranges, including meals that feature chicken. This includes burgers, salads and wraps.

Finally, Britons are becoming increasingly adventurous when it comes to their food. This is fuelling a demand for other fast food and takeaways. Sushi, Thai and Mexican are currently the most up-and-coming cuisines in the market. Chinese and Indian have also overtaken fish and chips to become the UK’s favourite takeaways/

Despite industry growth, market conditions are tough for fast-food and home-delivery operators in the UK. Cash-strapped consumers are dining out less frequently. When they do so, they are going to sit-down restaurants that offer both quality and good value; this has hindered volume sales in the market. Moreover, the industry expected 2012 value sales to be boosted by sports events and royal celebrations, but this trend failed to materialise. Nevertheless, there remain several niches in the fast-food and home-delivery outlets market, including the growing importance of the breakfast and snacking occasions.

Key Note expects that the market will continue to grow over the next 5 years. Overall, it is forecast to rise by 6.8%. Ultimately, the industry will be saved by the convenience it offers to busy consumers who are looking for a quick and hassle-free mealtime solution, especially during the week. Operators will continue to invest in their menus and online operations to maintain market dynamism. They will also focus on improving the quality of their products to add value to the market and break away from the perception that fast food is unhealthy and a major player in the growing obesity crisis in the UK.

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