CACI, the consumer and location intelligence specialist, has revealed a significant trend towards lower price point hospitality venues performing well, in the midst of consumer cost pressures.
These findings come from CACI’s latest data platform, Brand Dimensions, which tracks spending across 300 of the best-known brands in the UK. CACI has found that from November 2021 to November 2022, the vast majority (83%) of F&B brands with a sub £15 average transaction value (ATV) – including the likes of Pret a Manger, Greggs, Tortilla, Chopstix, and itsu – saw strong market growth. This compares with sales growth for only 29% of operators with an ATV of £30 or more.
In addition, brands with a clear campaign have also performed well, with some of the UK’s biggest names, from McDonald’s to KFC to Franco Manca, deploying successful loyalty schemes. These have provided critical insight, allowing brands to deliver value and improve their offering by understanding who their customers are, driving both visit frequency and spend.
Brand Dimensions has also highlighted the impact of this on the delivery sector. UberEats and JustEat have grown their market shares respectively by 0.3% and 0.9%, taking away from Deliveroo. This is likely because they are 16% cheaper on average and have a wider geographical spread than Deliveroo, whose market share declined by 1.7%.
CACI has found that this trend is also mirrored in pubs and bars, which saw 38% market growth throughout Q4 of 2022, compared to Q4 of 2021. However, the average spend is down 16%, even with inflation and the rising costs of beer. Better performance matched with lower ATV suggests a trend away from ‘rounds’, as consumers want more control of their spend but are still socialising in force.
Rachael Bedford, Brand Dimensions lead at CACI, said: “Despite the ongoing challenges for UK hospitality, particularly looking at rising costs and the impact of strikes, consumers are still committed to spending on social occasions. They do appear however to be opting for lower cost options and money saving special offers; those that don’t break the bank and still offer a chance to socialise or have a night off cooking at home. While positive performance for evening focused dining showcases this, we do also have to consider that operators like Pret, Greggs, and itsu have benefited from lunch trade with more people returning to the office over the 12-month period.
“Through Brand Dimensions, we can further explore the fundamental relationship between brands and consumers. The performance of pubs and bars is a fascinating shift, with spend up but in a seemingly more controlled way, and could well lead to venues looking at how they can be more efficient in dealing with a higher number of smaller orders. The trend of lower cost socialising alone provides hospitality businesses with crucial insight into how they can adjust their offer to continue to appeal to their customers, in the knowledge that they are still determined to enjoy a meal or drinks out with friends, family, and colleagues.”
Profiling 300 of the UK’s biggest brands, as well as the latest emerging concepts across over 400 regions, Brand Dimensions tracks the total monthly spend, the average transactional spend, and the balance of spend across online and offline channels, revealing how brands are performing and the share of spend they are taking from consumers.