IGD report predicts faster than expected recovery for food to go sector; retail share to go down

Food to go sector is set to return to its pre-Covid levels in the second half of 2022, six months earlier than expected, latest channel forecasts from IGD have shown.

The sales value in the sector is predicted to reach £15.6 billion at the end of this year, which is 82.5 per cent of its 2019 value.

“This is a better-than-expected result, so is really positive news for the sector; by 2026, the market will be worth £22.7bn which is 20.5 per cent more than 2019,” Nicola Knight, senior analyst for food to go at IGD, commented.

“This will be the outcome of five years of growth at above pre-pandemic levels, following significant contraction in 2020, and will predominantly be driven by foodservice operators.”

The recovery, however, will not be consistent across sub-sectors, the forecast noted. Foodservice Food to go operators, (QSRs in particular) have been the main driver of the growth, increasing market share from 77 per cent in 2019 to 79 per cent in 2021.

In retail, the share of the food to go market is forecast to reduce to 21 per cent in 2021 from 24 per cent in 2019. This will gradually increase to 23 per cent by 2026 as momentum starts to return to retail food to go.

Knight explained: “In 2021, retailers have faced increased competition from foodservice operators who adapted quickly to changing consumer habits and demands. And, due to the decrease in demand and shift in shopping habits, retailers reallocated space to other categories. While larger stores have benefitted from consolidated shopping missions, smaller stores have experienced a greater dip in sales but, conversely, are likely to recover more quickly as some pre-pandemic behaviours return.

“Whilst there have been some new product launches and major projects that were delayed due to the pandemic are now beginning to appear in stores, the challenge for retailers now is whether they can close the gap in market share. It will depend on how far consumers return to pre-Covid habits and how fast retailers adapt to changes in behaviour that stick.”