The relative success of branded food to go offers over independent non-branded foodservice is highlighted in new research The NPD Group has published today [Wednesday].
The research, which covers ready-to-eat food sold in shops and petrol stations, as well as the traditional foodservice sector, identifies shoppers are more likely to spend their money at branded outlets when eating out of home.
NPD’s research shows that the market share for brands versus independents in terms of number of visits was 43% to 57% eight years ago. This has now nearly reversed as of the year ending (YE) September 2016 with the brands leading at 56% to 44%.
It says: “That means branded businesses in YE Sept 2016 are enjoying 1.2 billion extra visits in Britain’s £50bn foodservice industry than eight years before.”
Brands have boosted annual sales from about £20.9bn to more than £30bn today over the same period. Independents have seen sales dive from £30bn to £23.2bn.
The research also shows that brands enjoy strong pricing power, enjoying a 16% increase in the average bill per person over the past year years as against 4% for independents.
One of the drivers for brands is breakfast and meal deals, says NPD. Brands can attribute 14% of their visits to breakfast trade – a much higher proportion from the 8% seen for independents.
It says brands derive more than 36% of their visits through meal deals or promotions, while independents only succeed in driving about 13% of their traffic through this tactic.
The findings vindicate those convenience stores that have focused on providing nationally known brands such as Costa Coffee, Subway and Greggs, locally-known brands such as Peppes Pizza at Eat 17 in Walthamstow, east London, or brands shop operators have created themselves, such as David’s Kitchen, established by independent David Sands in Falkirk and Glenrothes.
And it corroborates the importance of foodservice overall, which the Association of Convenience Store’s Local Shop Report 2016 identified when it found 13% of customers visit c-stores for a quick bit to eat.
Cyril Lavenant, NPD’s director of Foodservice UK, told C-Store that it did not matter if a brand had a national name or had created its own brand, such as David’s Kitchen. Its success depended how that brand was conveyed to consumers.
“It doesn’t have to be a big chain to be good. The market is becoming increasingly competitive. Everyone is offering everything. The smaller guys don’t have so much money so they have to be creative. They have to be different from the others,” he said.