When it comes to spending money, it seems that the UK consumer is fairly predictable. The top three areas are retail food (you've got to eat it), housing (you've got to have it) and cars (well . . . !). In fourth place, however, comes eating out.

Eating out is no longer a treat or a luxury – it's a fact of modern life.

Total catering industry sales were almost £38 billion in 2006; food accounted for £28 billion of this and sales are projected by Horizons to grow to £31 billion by 2011.

Pub dining and restaurants – are showing the most growth, while new opportunities are being created in sectors related to leisure and travel. Growth is particularly driven by increased disposable income and the marketing activities of larger group operators, especially in the managed pub sector.

The out of home sector, having suffered in the first couple of years of the new millennium, has returned to growth levels seen in the 1990s. The principal reasons for this are:

• many leading group operators have energetically changed their offers to meet consumers' changing needs and perceptions
• in particular, they have recognised that pressure on consumers' time is becoming ever more significant - consumers have too many choices and not enough time. Eating out has to fight for its share of the "consumer hour" (as well as the consumer £).

Nevertheless some concerns remain:

• consumers are still worried about a range of things – the economy, potential terrorism, food ethics to name just three – and these have the potential to threaten the health of the eating out market
• retailers have developed many attractive grab and go offers that have taken the place of restaurants or take away meals.

Key Market Movements

There are a number of trends – most of them encouraging:

• in 2006, the total expenditure on food and drinks (excluding alcohol) was over £113 billion of which about £80 billion was spent in the home and £38 billion – or 31%of the total – was spent out of home
• in 2006, there were approximately 263,000 catering outlets in the UK serving 8.6 billion meals across all sectors
• in 2006, 5 billion meals were consumed in UK restaurants, fast food, cafes/takeaways, pubs, hotels and throughout the leisure sector
• between 2002 and 2006, restaurants have seen the biggest increase in meals across all sectors at 2.0% pa
• since 2002, education has seen an overall 12% decrease in volume sales – a reduction that has been principally driven by negative media publicity
• quick service outlets command the highest percentage of food sales with 26% (average spend: £4.48 per meal). Restaurants have a 20% share (average spend: £10.75 per meal); hotels with 19% of the market (£10.58 per meal)
• geographically, the South East and London have the highest number of catering outlets in the UK (71,600) followed by the south West (26,000) and Scotland (25,000).

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Food and Drink Sales in £million at 2006 Constant Prices

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