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MCA Insight said low consumer confidence would force people to eat out less

A no-deal Brexit will be a huge blow to the eating-out market, MCA Insight’s latest research has warned.

MCA Insight’s use of its own data and a statistical technique implemented via a machine learning algorithm has led The Grocer’s sister intelligence business to slash the forecast value of the eating-out market next year by £3.4bn-£5.4bn.

A “disruptive” departure from the European Union without a deal with current European partners was expected to lead to at least a £3.4bn fall, and a “disorderly” departure at least the higher of the two figures.

The sector has already shrunk 1.9% to date as a result of the Brexit referendum - equating to a drop of £1.4bn in value, the research has found.

MCA Insight said low consumer confidence would force people to eat out less and limit discretionary spend.

Operators and manufacturers needed to be prepared and ensure they had a plan to maintain their share of the market and look to grow in what could become an even more challenging market, MCA Insight said.

Daljit Johal, data scientist at MCA Insight, said it was clear that Brexit had already had a detrimental impact on the UK eating-out market.

“However, our forecasts predict even bigger problems if the UK leaves the European Union without a deal. A no-deal Brexit will reduce UK GDP by between 4.75% to 7.5% and slash up to £5.4bn off the forecasted value of the UK eating-out market in 2020,” he said.

“A no-deal Brexit will have clear implications on consumer confidence and spend. Rising inflation as a result of increased input prices will squeeze household incomes at a time when consumers are limiting discretionary spend.”

Saving was currently at a record low, said Johal. “However, we expect this to change as precautionary consumers save due to economic uncertainty,” he added.