The impacts of the Covid-19 pandemic still loom large across the food and drink industry, particularly in terms of consumer behaviour.
Food delivery apps remain popular since the sector’s seismic boom during lockdowns, changing how and where people eat. Consumers also have more options than ever, increasing competition.
The increase in remote working has seen reduced away-from-home footfall, as fewer people have daily commutes into towns and cities. Then there are multifaceted impacts of a struggling economy which dampen household finances and consumer confidence in the process.
The results can be seen in our new UK Total Consumption Forecast 2025-2030 report: slow growth in both at-home and away-from-home channels and what growth there is being mainly driven by inflation. This has wider consequences with no sign of a return to pre-pandemic growth levels in the medium term.
Creativity in retail
We’re finding that the industry is having to get creative in the battle for what I term ‘share of stomach’. This is seeing both the at-home and away-from-home channels innovate and collaborate, which is sometimes blurring the lines between the two. It would be a mistake for any business to fail to keep their finger on the pulse of what ‘the other side’ is doing.
Take Ikea, traditionally the go-to for home furnishing products: its famous meatballs have led to the company opening its first standalone restaurant in November 2024. Situated next to its Hammersmith store in west London, the restaurant offers “iconic Swedish dishes” and “a welcome break to the shopping experience”.
In the same month, Pizza Express opened its first ‘pod’ outside a Tesco Extra store in Southampton. The small-format site operates from a converted shipping container, offering a slimmed-down version of its menu. Pizza Express already features as a reward partner in the Tesco Clubcard loyalty scheme, so customers are encouraged to spend their Clubcard points as soon as they step out of the supermarket.
Earlier in 2024, KFC borrowed from retail to launch its own lunchtime meal deal, akin to supermarket offers with a main, snack and drink.
The art of survival
In a further instance of taking inspiration from supermarkets, Stonegate Group also rolled out a “digital retail screen network” in most of its 700 venues. As seen in some stores, the screens act as a sales channel, providing targeted brand messaging and promotional content to patrons.
Another interesting example I’ve seen is Aramark partnering with checkout-free technology specialist Zippin to open Europe’s first frictionless store in a theme park. Based at Legoland Windsor since May 2024, Duplo Coffee Co enables customers to shop by tapping their bank card or mobile wallet on entry, picking up their food and drink items, and simply walking out. The coffee offer includes Costa from self-serve machines.
This type of collaborative innovation leads me to the view that it shouldn’t be ‘them and us’. It should be ‘what can we learn from them to benefit us?’ Or even, ‘how can we work together to benefit us both?’
With businesses fighting for share against a backdrop of tough economic and market conditions, I believe the art of survival and success may be found in taking inspiration from elsewhere.
Nicola Knight, head of away from home retail insight at IGD
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