The Shifting Landscape: Trends and Insights from UK Hospitality in 2023

2023 seems to have disappeared in a flash. As I write this, it’s the final working week before Christmas, with the hospitality sector enjoying its first “proper” Christmas trade since 2019. Early signs this year look very positive, with many operators reporting record Christmas pre-bookings, so hopefully we’ll soon be able to look back on Christmas 2023 and conclude that it’s the year when things were finally firmly back on track.

As we approach the end of the year, I thought it would be an opportune time to look back over the past four years, reflecting on what’s changed in terms of the shape of the UK hospitality market and what this all means as we look ahead to 2024. One useful metric to gauge this evolution is the consumer "share of wallet" across different sectors of the hospitality industry. HDI's card spending data tracks the purchasing behaviour of 10.2 million individuals across over 180,000 individual venues right across the UK hospitality sector, including unbranded, websites and apps. This enables us to provide a very accurate view of what’s happening in UK hospitality, from an individual venue or local area level, all the way up to the market overall.

The changing shape of UK hospitality

Insights from the 12 weeks ending 5/12/23 paint a revealing picture. Delivery emerges as the frontrunner, claiming 12.5% of UK hospitality sales—a significant leap from its 6.5% share in 2019. Coffee & Sandwich shops follow suit, securing 12.7% of hospitality sales with a 2.0% increase. This shift means an additional £8 out of every £100 spent on hospitality now flows into Delivery and Coffee & Sandwich shops. Meanwhile, Casual Dining has seen the most substantial drop in spending, with its share down by 3.3%, with Pubs & Bars collectively attracting 4.8% less spending than they did in 2019. It’s worth noting here that some of the share of wallet declines in Casual Dining and Pubs & Bars will have shifted into Delivery, so operators may still be seeing the sales coming through. However, the changing shape of the market does illustrate some key changes in terms of how we’re socialising and engaging with the hospitality sector more widely.

On the brand front, it’s interesting to look at the key winners across the hospitality sector. Delivery aggregators understandably emerge as top performers here. However, in the realm of bricks and mortar, Greggs shines as the standout performer, with almost £2 out of every £100 spent in UK hospitality finding its way to their shops, up from £1.60 previously. Loungers are also a well-publicised standout performer, with their Lounge and Cosy Club brands mastering “all-day hospitality.” In the case of Lounge, its positioning as a café-bar successfully differentiates it from other operators, cleverly spanning the worlds of coffee shops and pubs & bars and enabling them to successfully cater for a whole range of different occasions across day and weekparts. There are a host of other brands who are also performing well, even within sectors that are seeing their share of wallet squeezed overall.

Analysing the success stories prompts the question: What lessons can we glean from these brands? I believe that their success is intricately tied to delivering a relevant consumer proposition consistently, with the ability to really understand their customers and tailor their offers effectively to local markets being key differentiators for the most successful businesses.

As we gaze into 2024, my sense is that the broad shape of the hospitality sector is going to remain relatively stable. Growing visit frequency and attracting new customers are likely to continue to be a significant challenge, which means that being able to maximise spend per visit through optimising price, mix and menu architecture will be more important than ever for operators. This is where investing in customer insight work to really understand your customers, competitors and local markets will really pay dividends; being clear on who your competitors are at a local level, tailoring your offer to meet the needs of your customers and optimising your pricing, mix and menu architecture to ensure that value isn’t being left on the table.

How can HDI help?

We’re building our reputation based on our unique combination of great data, analytical capability and hospitality expertise. We help hospitality operators and suppliers with insightful UK hospitality data, to better understand their customers, competitors and local markets to optimise performance.

Our key data sources cover the card spending of 10.2 million people and range & price data from c.15k hospitality venues and all major grocers.

Please get in touch if you’d like to find out how we may be able to help your business: mark.bentley@hdinsights.com

Looking ahead to 2024

One of my personal highlights of 2023 was delivering the first “Cracking the Sales Code” workshop in September, in partnership with Purple Story (The Home of Operational Excellence) . This session came about following a conversation we had with Karen Turton , where it was obvious that we were kindred spirits – we believe that the future of hospitality will be increasingly data-led, and Karen is a real champion of how the answers for operational teams can be pretty much always be found in data. We both recognised that tricky part can often be having the critical thinking skills to be able to turn data into actionable insights...especially from an operational perspective when so many plates are spinning! This led us to create a pilot workshop, to see if combining our expertise in data and behaviour could prove to be a winning combination.

Following the success of our first “Cracking the Sales Code” workshop in September, we’ve decided to run a second event in the New Year. This will be on Wednesday 24 January, at Revolución de Cuba Birmingham and you can find more details, including how to book a place here: Cracking The Sales Code: Data Insights & Critical Thinking for Hospitality Tickets, Wed 24 Jan 2024 at 10:00 | Eventbrite

Described as “The only critical thinking and data workshop you'll EVER need,” the workshops are a great opportunity for operators to take a step back from the day job and invest in their development. We bring our insightful UK hospitality data (every attendee will receive a Site Intel Pro report for one of their venues), whilst Purple Story bring their knowledge around behaviour and critical thinking to help turn data into actionable insights.

I'm Mark, Business Development Director of Hospitality Data Insights (HDI), thanks for reading.

If you want more from me, here's what you can do ⬇️

🔗 Connect with Me

📧 Sign up for my newsletter (click subscribe)