Industry leaders anticipate long-term demand for more delivery and tech-led solutions

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A shift in lifestyles has meant both the grocery and hospitality market is adjusting to consumer demand for more delivery and tech-led solutions, a new report from Lumina Intelligence has revealed.

According to the market researcher’s Top of Mind Business Leaders Survey, both grocery and eating out professionals have listed demand for home delivery; use of internet/mobile tech/apps’ and changing behaviour of younger consumers as the three most important long-term trends in their sectors.

Top trends Overall Eating Out Grocery Retail
Demand for home delivery 34% 34% 34%
Use of internet/mobile tech/apps 34% 37% 31%
Changing behaviour of younger consumers 29% 30% 28%

Source: Lumina Intelligence 

For most business leaders, there is an expectation that pandemic triggered closures and mergers and acquisitions will increase in the coming 12 months.

While half of the surveyed grocery retail professionals (50%) agreed that the next 12 months will see an increase in casualties amongst food and drink retailers, 89 per cent of the hospitality business professionals agree or strongly agree that this period will see an increase in casualties among eating out brands.

At the same time, a similar number predicted more merger and acquisition activity for the grocery retail market (88%) and the eating out market (89%).

“Despite restrictions easing, businesses operating in the grocery retailer and eating out markets are less positive about current trading conditions than they were in October 2020. However, businesses are much more positive about future trading conditions,” commented Katie Prowse, senior insight manager at Lumina Intelligence.

“It is clear that business leaders agree with our forecasts that key pandemic-led trends will continue to evolve post-pandemic. Consumers have been forced to embrace new things during the pandemic, which have since evolved into well-established habits. Delivery and technology have always been key to attracting younger consumers, however the pandemic has resulted in all demographics embracing these trends and truly increased the opportunities available to retailers and operators.”

The survey has also shown that challenges around importing/exporting and staff shortages have been the biggest impacts of Brexit to businesses within the grocery retail and hospitality sectors.

Over half named import/export administrative efforts as well as supply chain difficulties as a result of Brexit as having the biggest impacts on business. Staff shortages has been an impact felt more by hospitality leaders, applicable to almost two thirds (63%) of those surveyed. Almost two thirds (63%) of surveyed grocery retail professionals said that increased import/export costs have impacted their business.

Overwhelmingly (75%), UK food and drink leaders believe that the UK government should be supporting businesses on overcoming Brexit challenges.

“Brexit, coupled with heavy restrictions on movement caused by the pandemic, has resulted in significant resource challenges for businesses across the UK food and drink industry. Business leaders want to see the government do more to support. Issues surrounding the UK’s departure from the EU including trade deals, processes around imports and exports and EU worker rights in the UK are all the remit of the UK government and so it is vital that it plays a leading role in aiding, communicating and working alongside businesses throughthe transition,” Prowse said.