Sluggish consumer spending continues to hit restaurants

The number of full-service restaurants across the UK is expected to decline by 1% in 2025, as limited disposable incomes continue to affect out-of-home (OOH) visits. 

According to the latest insights from IGD's new Away From Home (AFH) service, premium dining is likely to fare better than casual restaurants as wealthier consumers continue to spend. Meanwhile, insights suggest that independents will struggle to shoulder rising costs, paving the way for more group operators. 

Indies that effectively communicate their unique offerings and engage with changing consumer trends will likely perform better against a tough trading backdrop. IGD also outlines opportunities for all operators, who should look to promote special occasions and drive efficiencies. At the same time, suppliers should seek ways to build stronger relationships with customers to build loyalty.

Industry forecast

These insights are part of IGD's AFH proposition, which kicks off with the launch of the AFH five-year market forecast for 2025–2030. AFH currently accounts for over a third of the UK's total food and drink market, worth £102.3bn – up 2.5% in the year to April. 

The IGD forecast projects a CAGR of 4.8% from 2025 to 2030 to reach £123.3bn, primarily driven by inflation and steady population growth. However, in real terms, market value is not expected to recover to pre-pandemic levels within the forecast period, highlighting the continued economic pressures facing both consumers and operators. 

Kate Nicholls, chair of UKHospitality, says of IGD's new AFH service: "The new AFH market forecasts from IGD provide a comprehensive overview of the dynamic hospitality market and consumer behaviour, both now and into the future. These valuable insights are crucial for informing our work across hospitality, helping operators to plan effectively for the future and supporting our work with the government on behalf of the sector."

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