20/03/2006
Takeaway and convenience food sector predicted to be worth £12.3bn in 2015
A report out today predicts 70% growth will be seen in the takeaway and convenience food sector*, over a 15 year period up to 2015. Increased trust in online purchasing, the introduction of new e-commerce platforms, increasing consumer time pressures and the popularity of at-home leisure activities, are expected to be the key growth drivers for the convenience sector, set to be worth £12.3bn by 2015.
The 2015 Convenience Food Report from the independent think-tank - The Future Foundation - was commissioned by the UK’s leading home delivery pizza operator, Domino’s Pizza.
The report reveals the key technological, social and demographic drivers over the next decade, which will drive forward huge growth opportunities in the convenience food sector. In 2005 £62.8bn was spent on in-house leisure, and this is expected to rise to £91bn by 2010. Over half of adults feel under time pressure on a regular basis, rising to 70% for those with families, demonstrating why convenience solutions have become so integral to daily life.
The rise of e-commerce in particular will have the largest impact on future sales as consumers continue to seek solutions for their increasingly busy lifestyles. It is predicted that the internet, interactive TV and text-messaging (SMS) will eventually overtake telephone ordering of collection and home delivered foods.
Chris Moore, Domino’s Pizza’s Chief Operating Officer, comments, “Domino’s Pizza really began to boom ten years ago because we could fulfil a need of a cash rich, time poor society. We responded by utilising time efficient technological developments such as broadband and continue to make the most of this growing sector.”
In fact, the home-delivered pizza market is expected to experience particularly strong growth, increasing from £540m in 2004 to over one billion (£1,105m) by 2015. By then, one in three home delivered pizzas will be ordered via e-commerce channels and sales will grow from an estimated £13m in 2005, by over 2877%, to £374m in 2015. SMS technology will see the biggest growth in the next five years, and will be worth £44m in 2015, more than three times the current worth of all e-commerce sales. In ten years, 3G technology, the usage of .mob sites, and converged PC/TV set-top boxes will also have begun to have an impact.
These factors, together with increased confidence in the internet as a medium for e-commerce, will take total internet sales to £316m in 2015, and interactive TV sales to £14.4m in 2015. Internet access will be near universal amongst the UK adult population by 2015.
Chris Moore adds, “Companies which embrace e-commerce channels look set to capitalise most on sector growth moving forward. Domino’s Pizza already has the infrastructure in place via a nationwide online ordering and interactive TV offer, which continues to see record sales growth week-on-week. We are already looking ahead to the evolution of technologies such as SMS and 3G although it remains to be seen how others in the sector will take advantage of these new platforms.”
Other expected growth drivers include:
-
At home leisure: increasing affluence and subsequent spend on in-home leisure will result in increased convenience food spend. In 2005 £62.8bn was spent on in-house leisure, which is expected to rise to £91bn by 2010. By far the largest component in increasing in-home leisure spending is the massive growth of home-based entertainment technology.
-
Social changes: an ageing population will not only continue to enjoy home-delivered food as they age, but also be more technology savvy than their predecessors. Relatively young markets, such as home delivered pizza, will particularly benefit as current loyal customers will continue to purchase into retirement age. In addition, a shift away from the traditional family household will see more eating occasions shared with guests.
-
Food experimentation: the ability to adapt to changing consumer needs, including healthy alternatives and multiple choice options, is predicted to shape the future face of the convenience sector. Over one tenth (11.9%) of adults say that eating good quality food is the best description of luxury in their lives. An ability to adapt the basic format of pizza plays well to emerging consumer tastes and consumer concerns such as novelty recipes and healthy eating.
These trends are expected to continue the recent good times for home delivered pizza which, until now, has been driven mainly by increasing affluence and the rising value of consumers’ time. This market has seen spectacular annual growth of between 8% and 16% in the last five years. It currently accounts for 6.4% of the total convenience food sector (up from 4.3% in 2000) and is set to grow to 9% by 2015. Carry-out services have seen a lesser rate of growth, accounted for by people’s increasing demand for time saving services.
William Nelson from The Future Foundation says, “This report reveals that there is huge potential for companies within the convenience food sector over the next decade. Those that can quickly capitalise on emerging consumer trends and deliver a quality product will benefit most. We’ve already seen many companies within the sector having to adapt outside of their core offer in order to meet existing needs. Where the pizza market differs is in its ability to adapt without diversifying from its key offer. Companies that offer a home delivery focus such as Domino’s are better placed to take advantage of trends than take away only operators”.
For a full copy of the 2015 Convenience Food Report report, further information or photography please contact Hannah Bourne, Sara Barrow or Lynn Brown at Lexis PR on 020 7908 6488 or hbourne@lexispr.com
Notes to editors:
-
The 2015 Convenience Food Report was written by The Future Foundation and commissioned by Domino’s Pizza in October / November 2005.
-
Takeaway and convenience food sector: The sector is defined as Fast Food delivery services, Pizza delivery and takeaway, Take away food shops (incl. Quick Service Restaurants such as McDonalds), Fish and chip shops, Bakers, Mobile catering, Coffee shops, Pizza restaurants that provide a carryout service and Sandwich chain shops.
*Spending on the convenience sector in 2004, in £m at retail selling price
Total Sales
Home-delivered
Carry-out
Pizza
700
540
160
Chinese
840
300
540
Indian
678
203
475
Fish & Chips
920
112
808
Other ethnic/fast food
135
38
97
Fried Chicken
666
33
633
Burgers
1248
18
1230
*Total value of take away and convenience sector (actual and predicted in £m)
2000
7,243
2005
8,744
2010
10,342
2015
12,251
70% relates to the increase in sector value between 2000 and 2015.
Between 2005 and 2015 the sector is expected to increase in value by 40%
More on Domino’s Pizza
-
Domino's Pizza Group Limited is the leading player in the UK and Ireland's fast-growing pizza delivery market. Domino's Pizza UK & IRL plc is the parent company of Domino's Pizza Group Ltd which holds the exclusive master franchise to own, operate and franchise Domino's Pizza stores in the UK and Ireland. The first UK store opened in 1985 and the first Irish store opened in 1991.
-
As at 10 January 2006, there were 407 stores in the UK and Ireland. Of these, 332 stores are in England, 29 are in Scotland, 13 are in Wales, 9 are in Northern Ireland and 24 are in the Republic of Ireland.
-
Founded in 1960, Domino’s Pizza is the recognised world leader in pizza delivery. Through its primarily franchised system, Domino’s operates a global network of over 8,000 stores in more than 50 countries
-
Further information and photography is available from Sara Barrow at Lexis Public Relations on 020 7908 6488 or at the Media Centre on www.dominos.uk.com.
More on The Future Foundation
Part of the Business Strategies division of Experian, the Future Foundation is an international commercial think-tank and strategic consultancy specialising in understanding social change and consumer behaviour.
