In Focus
RESEARCH | Staff Reporter, UK

Food delivery spend may hit £7.1 billion in 2020, NPD says

Consumers are expected to eat out when the second lockdown is lifted.

Spending for food delivery may go up by 42% at £7.1 billion as demand for such service continues to persist amidst COVID-induced regulations, according to the NPD Group.

Comparing the January-to-October period this year with the same period in 2019, the insights firm says delivery was up 14% in visit terms to 804 million and has seen a 40% increase in spend to £5.7 billion.

Looking at current trends, NPD says delivery could potentially finish 2020 with 1.1 billion visits. This would be the equivalent of a 12 million monthly increase in visits versus 2019 and a £177 million monthly boost to spend.

“Delivery is the silver lining in the otherwise very black cloud that hangs over Britain’s foodservice sector and has been the standout performer in 2020. Delivery spend peaked in July at 51% above pre-COVID levels but this trailed off as foodservice operators re-opened and with the August Eat-Out-to-Help-Out scheme,” NPD Group insights director for foodservice Dominic Allport said.

“It’s now rising again amid the return to stricter lockdown rules and we expect it to see further success in the colder winter months and on into 2021. While the delivery channel is often seen as a threat by some operators, during the COVID-19 crisis it is bringing valuable business to many outlets that are otherwise facing the severest business challenges, and helping to feed a nation locked down in their homes.”

Delivery now accounts for 16% of the foodservice industry’s £41 billion spend compared to 9% pre-COVID, benefiting Just Eat, Deliveroo and Uber Eats, who have seen January-to-October business expand 20% to hit 352 million visits.

In total, NPD says delivery aggregators have increased their share of the market’s spend nearly threefold and now account for more than 8% of the total foodservice industry. The firm expects delivery aggregators could finish 2020 with sales of more than £3 billion, up £811 million compared to 2019.

NPD’s research also shows that consumers still continue to value eating out and many plan to do so as soon as they are able, with 50% saying they prefer to dine out or get a takeaway from a restaurant when spending time with friends. Almost six in 10 (58%) say they choose restaurants to eat ‘something special’.

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