According to our latest consumer research, 84% of Brits think the UK will enter into recession, up from 57% only three months earlier (HIM recession survey, March and June 2008) and unfortunately out-of-home-eating is one key area where consumers are planning to cut back spend in the next 12 months.
There is bad news for pubs, with 36% of consumers saying they don't plan to visit a pub in the next 12 months, and 24% saying they will spend less in pubs in the next 12 months, up from 14% in March 2008.
It's the same story with takeaways and ready meals - there has been a big increase in the numbers saying they will not be buying them in the coming year, and cutting back. Fifty three per cent of the nation will cut back, or not buy at all.
When it comes to restaurants, 25% of the nation plan to spend less on eating in restaurants in the coming year, again up from only 14% in March.
Fast-food outlets are likely to suffer too, if consumers do what they say they will do. Two thirds of the nation will either not use these types of outlets, or will be cutting back expenditure.
A year is a long-time. This time last year, Tony Blair had only just left office as Prime Minister. Our biggest concern as a society was terrorism. Now, a year later, unemployment is rising, inflation is rising, the housing market has fallen into free-fall and consumer confidence is at an all-time low.
But should we not all be excited by the prospect of getting back to basics and focusing on excellent marketing and retailing skills?
Business gurus say the last thing that should be cut when a recession strikes is research, marketing and advertising. Never is it more important than during a recession for companies to watch and listen to consumers, to tailor products to their needs and to invest in long-term growth strategies based on customer insights.
Let's not dwell on the current economic problems - let's think where future foodservice opportunities could lie:
l Consumers may eat dinner at home, but want to pop down to the pub or a restaurant for a dessert and a great bean-to-cup coffee. Is this available in the on-trade?
l Consumers may be attracted by BYO (bring your own) restaurants - good food, but they bring their own drinks. Is this actively encouraged? Probably not at the moment. Maybe it needs to change.
l Consumers may be attracted by eating out more at lunch rather than for dinner. "Daytime deals" could become more the norm.
l "Meal deals" will become increasingly attractive. Restaurants will offer two or three courses for a price. Pubs often have two main courses for a discount, but this could decrease transaction spend. Pubs may want to think about packaging courses together to increase transactional spend.
l Consumers may enjoy going for lunch alone providing the right environment is created. "Check your emails over lunch..."
l Consumers will enjoy establishments who become famous for something - ie a malt whisky range. This presents an opportunity for many operators.
l Customers may not feel they can justify buying a bottle of champagne, so will pubs and restaurants offer bubbles by the glass, including more affordable sparkling wine, and promote it. It never ceases to surprise me that staff in pubs and restaurants don't suggest a glass of bubbles to start the evening when I go out for dinner - it's almost harder to say no than yes.
Interesting times lie ahead. Those who continue to do what they've done for the last few years can survive... but those who adapt to the changing conditions and follow and exploit changing consumer demands will survive, I can promise you that.
Will Government proposals to ban the display of tobacco in retail premises damage the wholesale sector?
- 27 November, 2008
FWD Annual Dinner & Gold Medal Awards
