Food delivery market set to rise, survey finds

Over 70 per cent of hospitality and leisure operators believe that the food delivery market will continue to expand with 45 per cent expecting to increase their delivery sales over the next two years, according to a new survey from audit, tax and consulting firm RSM.

The UK has the largest food delivery market in Europe and is currently worth around £10bn. The market has grown rapidly in recent years due in large part to the emergence of online ordering apps such as Just Eat while more operators are opening 'dark kitchens' to capitalise on the trend. Respondents to RSM's latest survey believe that market turnover could rise by a further 45 per cent over the next five years. 

The survey of over 300 middle market consumer business leaders, also revealed a high degree of optimism among club, bar and restaurant operators, with 82 per cent saying they were optimistic about the prospects for their business over the coming year.

However, when asked about their priorities for the coming year, respondents highlighted reducing costs as the number one priority. Eighty-six per cent said that they have already reduced or plan to reduce rental costs, while almost 40 per cent are seeking to increase internal efficiencies as a means of reducing the impact of National Minimum Wage and National Living Wage rises.

An overwhelming 87 per cent of respondents in the sector said they had experienced difficulties recruiting over the last 12 months, and this looks set to continue as 81 per cent expressed concerns that the ending of freedom of movement will impact their ability to recruit effectively. 

Commenting on the findings, Paul Newman, RSM's head of leisure and hospitality said: 

'The majority of respondents to our survey agreed that there is still potential for expansion in the delivery market but operators considering a move into home delivery need to carefully consider the costs and the potential impact on dine-in custom and brand equity. 

'Overall, bars, restaurants and club operators are feeling positive about the year ahead but remain focused on reining in costs. As a result, landlords can expect more attempts by operators to renegotiate lease terms as a means of mitigating increases in operating and staff costs.

'While there are some signs of a Boris bounce in early year trading, consumer confidence could be rocky over the coming year, so operators will need to remain alert and adaptable.' 

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