The UK Food service market is estimated to be worth USD 100.24 billion in 2024 and is anticipated to reach USD 142.65 billion by 2029 with a CAGR of 6.78% during the forecast period.
The UK Foodservice market accounted for considerable growth during the forecast period and is projected to have notable growth during the forecast period. The UK food service market is diverse, offering a wide range of international cuisines. The United Kingdom is widely known for its traditional pubs, which serve as social gathering places for locals. The British dining culture has a hallmark of good food and a cozy atmosphere. Most of the UK's pubs serve high-quality food and a wide range of beverages. The UK region hosts many food festivals and events annually to celebrate regional and international cuisines. These festivals attract tourists, food enthusiasts, chefs, and artisans. All these scenarios in the United Kingdom are accelerating the UK Food Service market revenue. The UK has a different pub culture from that of other countries. It is estimated that there are around 60,000 pubs in the UK, each with unique character and charm. It is believed that the pubs are not only for enjoying drinks but also for hearty British food.
The increasingly frequent changes in consumer preferences and the changing lifestyles of the people primarily contribute to the UK food service market growth. The people's busy lifestyles encourage them to choose food services that will save time and provide unique taste experiences. The growing demand for takeaways and enlarging online food delivery platforms across the country are boosting the regional market growth rate. In 2022, the United Kingdom accounted for over 46.2 thousand takeaways and fast-food restaurants. Quick-service restaurants are gaining widespread traction among consumers due to their benefits, such as unique flavors, ingredients, and rapid service, accelerating the market growth expansion. The average price of burgers and chicken wraps is USD 4.5 and USD 5.4 per serving in 2022 the United Kingdom. The availability of budget-friendly, rising number of food service providers, international cuisines, and the increasing demand for authentic European culinary dishes are propelling regional market growth. According to a few reports, in 2022, pizza and chicken shish kebabs are popular dishes offered by cloud kitchens in the United Kingdom. In 2022, the cost of the most popular dishes was fixed at 50% of the average order value. The increasing adoption of modernization among people and the increasing penetration of digital technology and smartphones are accelerating online food orders, creating market growth opportunities.
High operational costs in the restaurant business will hamper the market growth rate. The rent, utilities, wages, food costs, and added pressure of supply chain disruptions are all challenging for restaurant owners to expand the market revenue. The availability of limited labor, low pay, and high turnover in restaurants will limit market growth. The high turnover leads to increased recruitment and training costs and affects the quality of service. Waste management is another primary factor restraining the growth of the UK foodservice market. The impact of food waste on the environment and profitability is one of the major concerns for the market players. Food is a concern for the current owners as it has a significant environmental impact and negatively impacts profits. According to Verdict Food Service, UK restaurants produce 915,400 tones of kitchen waste annually, of which 75% is avoidable.
The increasing number of virtual and ghost kitchens nationwide and their gaining consumer traction are estimated to propel the UK foodservice market with growth opportunities in the coming years. These significantly limit the overhead cost associated with renting the physical location, maintaining dining areas, and limiting staff, and the rapid delivery of quality food is enhancing their popularity among consumers. Adapting to changing consumer preferences, rising technological advancements, and the growing number of new establishments are expected to augment the market growth opportunities during the forecast period.
With intense competition among the food service providers in the industry, UK restaurants are highly competitive, and new establishments open up all the time, which will be challenging for the providers to survive the competition. Market players must offer unique food products and enhance ambiance or customer service to attract customers, which is a challenge. There is a need to adapt to consumer preferences as consumer preferences constantly change towards health-conscious and ethical eating habits. Market players must meet consumer demands to survive the competition, which may limit market growth. The stringent regulations by the regulatory authorities regarding food safety and quality will be complex and time-consuming procedures that will negatively impact market revenue.
The quick service restaurants segment dominated the UK foodservice market with notable market share due to a growing preference for fast food among the people. The ease of access, hygiene, service time, and ambiance are majorly influencing the consumers to adopt quick-service restaurants, which fuel the segment revenue. The growing busy lifestyles of the people are allowing them to seek quick meals that can be served rapidly; they excel at delivering on need, which makes them a popular choice among consumers, leading to segment growth. Most QSRs are budget-friendly and highly affordable, especially for individuals seeking a budget-friendly broad menu that fuels market growth. The enlarging cloud and ghost kitchen sector, which delivers food rapidly without any physical stores, is escalating the market growth rate.
The full-service restaurants segment is estimated to grow prominently during the forecast period. Most tourists visiting the UK seek hygiene and authentic culinary dishes, which fuels the segment's growth rate. Full-service restaurants are focusing on gaining a customer base by providing healthier and more appealing dishes to the consumer due to the growing demand for nutritional diets in the United Kingdom, which drives market growth.
The commercial segment held the most significant share in the UK foodservice market and is projected to maintain its dominance during the forecast period. Consumers in the UK are increasingly seeking high-quality and diverse dining experiences, escalating the demand for food services in traditional commercial restaurants and fueling the commercial sector. The growing number of cafes and bars in the country due to the increasing consumption of tea and coffee is estimated to impact segment growth positively. Various reports indicate that around 70% of consumers in the United Kingdom drink at least two cups of coffee or more daily. The expanding food and beverages industry is accelerating the segment growth.
The institutional segment is predicted to grow fastest during the forecast period due to the escalating non-commercial sector involving school cafeterias, hospital cafes, and corporate dining facilities. The growing awareness among the people regarding health and wellness in the UK is enhancing organizations' awareness of healthier food options in the non-commercial sector. Most schools, offices, and hospitals offer more nutritious meals, fueling the segment's growth.
Major key players of the UK food serve market include McDonald's Corporation, Domino's Pizza Inc., Yum! Brands, Greggs Plc, Nando's, Starbucks Corporation, Costa Limited, Restaurant Brands International, Inc., Baskin-Robbins, and Supermacs
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