Food-to-go consumers crave hot options at lunchtime – survey

15-Nov-2019 - Last updated on 15-Nov-2019 at 15:50 GMT

Consumers hunger after hot food-to-go at all hours of the day, but lunch time options are lacking, says IGD.

Insight provider IGD has spotted a gap in the market for hot options at lunchtime in the food-to-go sector. Its research carried out on 1,000 UK shoppers revealed that most (77%) wanted more hot food options at lunch times.

“We know that lunch time in food-to-go is still the most prevalent and most common mission, so you can see an opportunity there,” Rhian Thomas, Head of Shopper and Food-to-Go Insight at IGD said. “We think that part of the reason that hot food is not featuring as prevalently at lunch at the moment is that the options aren't there.”

Speaking at the recent IGD Live event in London, she said retailers could best exploit opportunities in hot lunchtime options via meal deals. She added the she believed consumers would be prepared to pay more for a hot meal during the day ‘when they see the need and value’.

Over half (55%) of respondents said they were prepared to pay more for hot items if it meant they were more filling and would mean less need to snack later in the day. Currently, said Thomas, food retailers face “opportunities to challenge perceptions among some consumers regarding the quality and freshness of the hot lunch items.”

Nicola Knight, IGD’s senior food-to-go analyst added: “Price important but so is value. Get across the quality credentials so that customers feel value from hot food at lunch.”

She urged retailers considering offering hot food items during the day to ‘hold their nerve’. “You can’t expect people to trust you as hot food provider from day one. They might have to come back several times before they understand your range and believe in your offering. So through that time you may have high levels of wastage. If that sounds like a big step, consider working with a partner. Partners can help you build you quality credentials."

UK food-to-go sector to grow by 26.4% by 2024

The UK food-to-go market is on track to be worth £23.4bn by 2024, more than double the growth of the UK food and grocery retail market as a whole (12.5%), according to IGD.

Thomas added: “Food-to-go remains a key growth opportunity for businesses, and one that appears particularly attractive given the structural and growth challenges being faced by UK supermarkets and hypermarkets right now.

“While there continue to be good opportunities for growth in this area, the gap will continue to grow between those businesses who are actively targeting food-to-go growth and those who simply want a presence in the channel. Opportunities remain, however, for those with clearly defined and relevant strategies.”

Convenience retailers such as Spar, Co-op and Tesco Expresss will increase their market share from 15.5% in 2019 to 16.1% in 2024, according to IGD. In contrast, food-to-go specialists like Greggs and Pret a Manger will record a 0.1% market share dip to 26.9%, although sales will rise from £5.0bn to £6.3. IGD predicted supermarkets and hypermarkets such as Asda, Morrisons, Tesco and Sainsbury’s: will lose market share, from 8.1% in 2019 to 7.8% in 2024.

However, grocers could potentially buck this trend by using hot food at lunch times to encourage shoppers to stay longer in stores.

Thomas said: “While IGD’s wider food retail market forecasts show continuing challenges for the supermarket and hypermarket channel, most of us still do a large portion of our food and drink shopping at these types of stores, meaning there is still much to play for. Expanded food-to-go and foodservice zones are a key strategy for these retailers to bring more shoppers into stores and encourage them to spend more while they’re there.”