Download Future Shock Report - Issue Four

Rising costs, intense competition and Brexit are creating significant challenges for operators in the out-of-home eating and drinking sector—but consumer trends including premiumisation and healthier eating and drinking offer opportunities for growth.

Those are among the key findings of the fourth edition of Future Shock, the exclusive series of market reports produced in collaboration between UK Hospitality, CGA and partners.

The report draws on CGA’s range of research tools to identify the big issues of the year in the hospitality industry. They include evidence from the Coffer Peach Business Tracker of like for like sales growth of just 0.6% in the year to August 2018, and news of a 2.5% drop in the number of licensed premises in the Market Growth Monitor from CGA and AlixPartners. The CGA Prestige Foodservice Price Index has meanwhile indicated relatively high levels of food inflation in the last couple of years. The combination of challenges has led to patchy levels of optimism among leaders in the sector, the latest CGA Fourth Business Confidence Survey shows.

The Future Shock report also uses CGA data to highlight some of the big consumer trends operators will need to respond to in 2019, including:

  • Growing interest in healthier eating, with CGA’s BrandTrack research showing that nearly two-thirds of eating and drinking out consumers try to lead a healthy lifestyle
  • Premiumisation in the on-trade—a drinks category that CGA estimates will grow by £3bn a year
  • The emergence of the omnichannel and ‘third space’, including pop-ups and festivals.

The fourth edition of Future Shock also analyses the fast-growing delivery market and the rising importance of ethics and sustainability in the sector. It emphasises the value of understanding the habits, needs and motivations of different consumer groups, and of providing consistently memorable experiences that stretch beyond food, drink and service.

Elsewhere in the report, UKHospitality provides analysis of the future of labour in hospitality, following the creation of the Hospitality Workforce Commission 2030, and reviews developments in important industry issues including collective copyright licensing and Primary Authority legislation. Future Shock also includes expert commentary on industry issues from partners on the report The London Essence Co, Prestige Purchasing, KPMG, P&G Professional and Discover Global Network.

Writing in the introduction to the report, Karl Chessell, Business Unit Director, Retail and Food at CGA, says: “Our analysis in the latest edition of Future Shock makes it clear that trading isn’t easy at the moment. With like for like sales growth sluggish, key input costs rising and competition fiercer than ever, operators need to be at the top of their game to succeed. Several other trends, like delivery and the rise of the third space, are adding to the challenges, and Brexit will bring fresh threats in 2019.”

He added: “But as the report also makes clear, there are plenty of opportunities too. Forward-looking operators who properly understand the habits, needs and motivations of different consumer groups, and who deliver memorable experiences, can still thrive. Responding well to the big trends we identify here—like premiumisation, technology, healthier eating and greater interest in ethics—will go a long way towards achieving that.”

Kate Nicholls, Chief Executive of UKHospitality, says: “Businesses are still facing a considerable amount of instability both economically and politically as Brexit approaches. It is at times like these that concise, clear and authoritative advice and insights become more valuable than ever. The fourth edition of our Future Shock report provides hospitality with the best advice to ensure they are prepared to meet the challenges ahead and capitalise on trends at the cutting edge.”

The fourth edition of Future Shock is available now, download here.


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