UK: Taste Of The Nation: Resilient Despite Rain And Races

Last Updated: 11 December 2012
Article by Deloitte LLP

UK consumers went out more often over the past six months, amid rising confidence as the economy began to emerge from recession. However, the mood remained cautious, and younger people went out less. And activity over the coming period is expected to be steady rather than spectacular.

With the nation glued to its TV sets over the summer, for the Queen's Diamond Jubilee and the Olympic Games, London saw a sharp decline in the number of times people went out. This was offset by stronger activity elsewhere, the Taste of the Nation survey shows, and the average monthly number of going out occasions rose 3.1 per cent to 20.4 in the six months to October, in line with expectations in our previous survey.

Among the highlights of the past six months, women went out increasingly often, while men were more likely to stay at home, and the west and south of the country saw growth while northern regions were flat. Interestingly, consumers have shown themselves to be consistently excellent predictors of their own behaviour. The previous edition of Taste of the Nation in April 2012 reported the expectation among consumers that the number of going out occasions would rise over the next six months by 3.6 per cent, which turned out to be very close to the final mark. Consumers also predicted more visits to coffee and sandwich shops, and the current survey shows that expectation was also correct with 9 per cent growth.

In contrast to Generation Y, which saw a decline in going out activity (for the first time since our survey began) both Generation X and the Baby Boomers increased the average number of times they went out. London has been a strong driver of growth in previous surveys and still has the most going out occasions. In that context, the slowdown over the past six months can almost certainly be attributed to one-off factors and unseasonably wet weather.

Consumers remain in a cautious mind set, with positive news on employment and inflation having an only slightly positive impact on confidence. The slow return of UK consumer confidence is reflected in the steady pace of growth in the going out market.

Overall, consumers are expecting to go out marginally less often in six months time. However, while Generation Y are planning to go out 8 per cent more often this Christmas, the average forecast across all demographics is for an 8 per cent decline in the number of Christmas going out occasions. A special feature in this report revisits the use of vouchers, which we first examined in October 2011. We look at consumers' expectations of vouchers, and ask whether they are delivering what consumers expect.

Vouchers have become an important feature of the licensed retail sector, driving footfall, encouraging trials and rewarding loyalty. We hope that this edition of Taste of the Nation helps operators better understand how the schemes are working for the customer. For those executives who have experienced the changing dynamics of the eating-out sector, we hope this fourth edition of our Taste of the Nation survey provides a valuable insight into how the business may evolve. We welcome your feedback and comments.

Executive summary

Consumers correctly predicted a slow but steady improvement in the market over the summer - a period that included the significant distortion of the London 2012 Olympic and Paralympic Games, and the Diamond Jubilee weekend. While the net impact of those events is uncertain, the going out market once again proved resilient. With the economy emerging from a double-dip recession, and news flow fluctuating between positive and negative, UK consumers remain cautious overall, but expect growth on some areas.

Resilient and stable market

Resilience and stability are the key messages in this fourth edition of the Taste of the Nation survey, with UK consumers showing an enduring appetite for going out over the recent period, despite economic headwinds. Overall consumer behaviour has been remarkably resilient, with 3 per cent increase overall but some subtle variations in market dynamics which we discuss below.

Generation Y shows moderation, as London Slows

Generation Y has historically gone out more often than other demographics, while London has led the way in terms of the frequency of going out and average spend. However, in the past six months Generation Y and consumers in London have changed their behaviour, with both segments going out less. At the same time Generation X, Baby Boomers and regions outside London drove growth. Given the exceptional weather and events, it is too early to say whether these changes should have any impact on operators' plans.

Weather and London 2012 may have caused London slowdown

The performance of the market in London is difficult to read, with operators reporting a mixed bag of results. The impact of the London 2012 Olympic and Paralympic Games was likely to have been material. In any event, Londoners forecast a bounce-back over the next 6 months, and we don't see any sign of fundamental change in patterns of behaviour. One notable trend in London was a decrease in the proportion of frequent casual diners to 8 per cent of customers, from 13 per cent six months previously. However, again Londoners predict a reversal, with this measure set to increase over the next six months to 9 per cent.

Women going out more often, while men stay at Home

There was a partial rebalancing between the going out behaviour of men and women. Men have traditionally been more active, going out more often and spending more. While this remains the case, women are closing the gap and going out more frequently, perhaps in response to some operators targeting female consumers more aggressively.

Coffee and sandwich shops remain the most popular option

Coffee and sandwich shops were once again the most visited venues, with 6.1 average visits per month, 9.2 per cent more than six months previously and 7.9 per cent higher year-on-year. The strongest growth came from the regions, with the Midlands up 22 per cent year-on-year and the South East excluding London up 12.9 per cent, as coffee shop chains continued their national store opening programmes.

Quick Service also shows signs of growth

The average number of visits to quick service venues rose by 6.4 per cent year-on-year to 2.7 occasions per month. These venues remain most popular with Generation Y and consumers in the North and London. Consumers forecast a drop in the number of visits of 1.6 per cent over the next six months, but it remains to be seen whether these good intentions will be kept.

Spending per head continues to increase in all areas except quick service and casual dining

All types of venue witnessed growth in terms of spending per head except for quick service and casual dining restaurants. The decline is significant given that frequency of eating out at these venues rose compared with October 2011. This suggests that spend has declined, pointing to possible concerns in the casual dining sector and may well be evidence of the over-use of vouchers as a promotional tool.

Vouchers not delivering on consumer Expectations

Against a backdrop of stability and resilience, albeit with some emerging shifts in patterns of going out behaviour, we revisited the topic of voucher promotions, one of the primary tools used by operators to drive footfall, encourage trials and reward loyalty. Our findings may surprise operators using voucher promotion, because they show that vouchers are failing to deliver on their implicit promise of the same experience but better value. Our research suggests that consumers perceive standard non voucher occasions as better value than voucher occasions and would be much more likely to recommend them.

By region, by demographic, by sector

Despite the cautious mood, and a period containing numerous distractions, consumers have continued to go out more often. Over the six months since our last report, consumer activity has increased by 3.1 per cent, and on average consumers now go out 20.4 times a month, or 245 times a year.

By region

London suffers a blip, but bounce-back is expected Londoners go out more often than consumers in other regions, but between spring and autumn 2012 consumers reported a sharp decline in the average number of visits to 25.7, from 31.3 previously. The frequency of going out increased or remained static in all other regions.

The performance of the London market over the past six months is difficult to interpret, due to the one-off impact of the London 2012 Olympic and Paralympic Games. Of the operators that have reported results for this period there is no consensus on whether the net effect was positive or negative, with significant variations depending on format and location, i.e. some venues close to the Olympic Park or other specific games venues reported an increase in trade while venues in the West End suffered a drop.

The London resident market contracted by 9 per cent, or 2.5 occasions a month between autumn 2011 and autumn 2012, and above average declines were seen in the pub, bar and club sectors. The decline in London was in part attributable to a drop in the proportion of "frequent casual diners" which fell from 13 per cent of diners in spring 2012 to 8 per cent in autumn 2012. Frequent casual diners are those defined as eating out 2-3 times per week. The positive news for the London market is that the proportion of frequent casual diners is set to increase over the next six months to 9 per cent as Londoners revert to more established modes of behaviour.

Other regions

Increases in going out recorded in the Midlands (up 13.1 per cent to 21 occasions on average per month) and the South West (up 15.3 per cent to 18 occasions on average per month) over the past six months looks set to continue, while the 11.8 per cent rise in the South East is forecast to reverse to a decline of 6.4 per cent.

The North remained fairly static over the past six months but is down 4.2 per cent year-on-year to 19.7 occasions per month. It slipped into third place on the regional table, falling behind the Midlands (Figure 1).

By demographic

Generation Y continues to be the most active segment, going out 51 per cent more often than the average and 71 per cent more often than the next most active segment - Generation X. However, the gap has narrowed from its peak in spring 2012, with Generation Y cutting back while Generation X went out more often, up two occasions per month on the previous survey and one occasion per month on a year ago. Baby Boomers, despite their relative affluence, remain the least active group, going out 11 times per month, compared with Generation X's 18 times a month and Generation Y's 31 times a month.

Across all demographics there is a degree of caution with regard to the next six months. Generation Y forecast a slight increase, while Baby Boomers predict a slight decline. This would mark a return to the previously established pattern and suggests that the autumn 2012 numbers are a blip rather than a fundamental change in behaviour.

Narrowing gender differences

The trend in our research shows that men consistently go out more often than women, with the gap between the two peaking in spring 2012. However, the difference has narrowed over the past six months and is forecast to continue to decline moving forward, as men expect to cut back and women to go out more often.

Growth among women

Men went out an average of 22.9 occasions in autumn 2012 down from 24.4 occasions in spring 2012, while women went out 17.9 times, up from 15.0 times. Women are now going out 22.5 per cent more often than when we first conducted this survey in spring 2011.

Men are cutting back

While men still go out 28 per cent more often than women, they have been cutting back and are also relatively pessimistic about their future behaviour, forecasting the decline will continue over the next six months. This combined with the fact that women are positive in their outlook on going out frequency suggests the gap is set to narrow.

Our research highlights only two areas of growth for men; going to a pub for a meal and going to a coffee shop for a drink. There were above average declines for clubs, bars for a meal and casual dining.

Spend by sub-sector

With the exception of quick service outlets and casual dining, all areas of the market saw growth in average spend over the past 6 months. The strongest growth in spend was in the fine dining sector, which managed the impressive feat of growing spend at the premium end of the market during a recession. The number of occasions stayed steady at one occasion per month, which means that the increase in average spend was driven by higher spending on each visit. Whether this was due to an increase in consumption or an increase in prices is not clear.

The decline in the quick service and casual dining sectors is significant given that frequency of going out to these venues remain stable compared with October 2011 and is forecast to remain stable. It suggests that spend has declined. This points to deeper issues in the casual dining sector and may well be evidence of the over use of vouchers as a promotional tool.

In terms of the demographic breakdown of spending, men continue to spend more than women and consumers in London spent on average 10 per cent more across the board than consumers in any other region. However, since the trend in frequency of going out for the London market was down over the past six months and that growth came from the female market, these trends would indicate a higher negative impact on overall spend per head.

Vouchers are failing to deliver on expectations

Vouchers have remained a familiar part of the going out experience since we last looked at this topic a year ago. At that time we identified the key role that vouchers can play in driving visitation, particularly among Generation Y. Voucher use has become more sophisticated and they are now used to influence loyalty and encourage consumers to go out more often and spend more. At the margins they have changed some consumers' perspective on the going out experience, while for others they have had little or no impact. But are they in danger of becoming victims of their own success? And must they continue to be an important part of the marketer's armoury?

In this report we show that consumers expect all aspects of the eating out experience to be the same whether they use a voucher or not. They don't want to compromise; they just want to save money.

What is important to consumers when eating out?

In general, what is important to customers stays the same regardless of whether they use a voucher or not. Quality of food and drink is most important, followed by value for money.

Generation Y, the least affluent segment, prioritises value for money above quality of food and drink. Conversely, Baby Boomers place a greater emphasis on quality, and significantly so.

In terms of regional bias, those consumers that live in London are more likely to prioritise quality of food and drink than those living in other regions.

What do consumers expect when they go out?

In terms of consumers expectation of the voucher occasion and its difference from a non-voucher occasion there are some significant differences, notably in terms of value for money: consumers understandably expect voucher occasions to be better value for money.

The only area where they expect the experience of eating out to be compromised when using vouchers is when it comes to the range of food and drink available and this only ranks third in terms of their priorities.

This opinion is perhaps influenced by the prevalence of limited or selective menus as a key feature of many voucher promotions.

Operators should also note that while consumers expect there to be less choice, they do not expect any decline in quality of food, drink or service level when using a voucher. Limiting choice by producing specific menus will work as long as the quality is perceived to be the same. In fact menu development is one way in which operators can develop and retain loyalty without needing to discount.

Are vouchers delivering?

It appears that vouchers are not living up to consumers' expectations or to comparison with non-voucher occasions. This should be a source of concern to operators as vouchers are used both to recruit new customers and reward the loyalty of existing customers.

As noted above, consumers expect the quality of food to be the same whether they use a voucher or not, but when they do use a voucher they expect it to represent better value for money - a not unreasonable expectation but one that the voucher experience is failing to meet.

In terms of consumers' actual experience, voucher occasions were rated lower than non-voucher occasions across the board. This highlights a significant disconnect between expectation and experience: vouchers are failing to deliver if voucher experiences are perceived as being worse value for money than non-voucher occasions.

Voucher occasions rank much lower than standard occasions when it comes to convenience, which may not be surprising given that vouchers often restrict choice of venue. More worryingly, voucher occasions are ranked significantly lower than standard occasions in terms of quality of food and customer service, the former ranked as the number one priority for consumers when eating out.


The ultimate test of whether voucher promotions are delivering on customers' expectations of value and service is the customer's propensity to recommend. Our research shows that customers are much more likely to recommend a standard occasion than a voucher occasion, reinforcing the view that vouchers aren't always delivering on consumers' expectation.

So the question is: are voucher experiences becoming secondary or inferior occasions? Or is dissatisfaction merely indicative of the kind of venue most likely to offer vouchers? The two points are not mutually exclusive, but with vouchers now an established feature of the market, operators need to make sure that voucher occasions are competitive on more than price. Vouchers can be a powerful tool when product and service levels remain high.


The framework

Coffee and sandwich shops - Traditionally serving a range of teas and coffees, they can also sell hot and cold food such as soup, sandwiches and salad.

Quick service eating and drinking outlets - Fast food destinations where customers order and pay at the counter before dining, and where the focus is more on fast food than the range of teas and coffees available. The Pub/Pub restaurant - The pub can be traditional or modern, chain owned or independent, gastro or local pub, but it is not a bar.

Bars - Bar destinations tend to be more up-market in appeal than the pub, sometimes with an extensive wine and/or cocktail list, and where music is important. Casual dining restaurants - This category covers restaurants that are mid-range in price, slightly more informal, tending to offer a standardised menu.

Formal dining restaurants - Restaurants that are traditionally more expensive in cost and more formal in layout.

Clubs - Traditional late night destinations such as nightclubs, comedy clubs, and private members clubs where either a cover charge is levied or membership is required for entry. Our survey did not include live music gigs or live sporting events.

Definition of regions and population

For the purpose of this report, we have divided the UK (excluding Northern Ireland) into five areas, amalgamating our results into the following regions. We note that London has been separated from the South East for this report due to the difference in behaviour when compared with the wider region:

  • North - Scotland, Yorkshire & Humberside, the North West, the North East.
  • Midlands - The Midlands, East Anglia.
  • South West - The South West, Wales.
  • South East - The South East.
  • London - Greater London.
  • The population is split into three groups:
  • Generation Y - Those aged between 18-34.
  • Generation X - Those aged between 35-54.
  • Baby Boomers - Those aged 55+.

Calculation of mean

We have used the mean to calculate our data, so impressive predictions for different sectors must be placed in the context of the overall level of engagement in the sector, as even a small change in the mean may sometimes produce a high percentage change. This approach better allowed us to monitor national trends and track real changes in national consumer behaviour.

We have adjusted the reporting in this survey from mean occasions per year to mean occasions per month, as this was thought to provide more insightful analysis regarding consumer behaviour.


Before results are published the survey undergoes numerous quality checks to guarantee it is nationally representative and that respondents are giving valid and reliable answers.

Following these checks a few hundred respondents are removed from each survey. During the removal process we ensure that the overall sample remains nationally representative by age, gender and region.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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