Christmas Eating Out

Many people won’t be sorry to see the back of 2009. And this, if the analysts are to be believed, could prove to be the third and final ingredient required to trigger a UK-wide festive spending spree.

The first ingredient is great deals in the stores – and this year the prices of many products are at an all-time low. As Jonathan de Mello, Director of Retail at analysts Experian has observed “big-ticket items have come down massively, but next year I think they will go back up again. So now is the time to buy.”

The second is the confidence to spend – and with Nationwide’s consumer confidence index at its highest levels since early 2008 the building society’s Head of Economic and Market Analysis, Mark Saddleton, commented that “expectations for the future economic situation are buoyant reflecting widespread reports from various industry commentators suggesting that the worst of the recession is over.”

And as for that final ingredient – well we all know that the British like nothing better at the end of a rotten year than sticking two-fingers up at the tough times they’ve been through, and having a jolly good Christmas blow-out!

Which for people in McDonald’s and the wider “informal eating out” sector all adds up to one thing – December’s going to be a busy month! Now, that’s clearly great news for the coffee shops, quick service restaurants, sandwich bars and pubs that make up the informal eating out sector. But research has shown that’s great news for the wider economy too.

Earlier this year McDonald’s sponsored a major independent study by retail specialists Allegra Strategies – Eating Out in the UK – which surveyed the attitudes and behaviours of over 2,350 consumers, and conducted interviews with 130 senior executives at chain restaurants and independent operators across the UK to capture feedback on the strategic challenges facing the sector.

In short, it was thorough! Indeed, at first glance it might look a little over the top for a survey into the places where we grab a bite to eat at lunchtime, or enjoy a pie and a pint with friends in the evening. However, because so many of us now do these things, the informal eating out sector is now a significant industry in its own right.

But it’s an industry most people rarely even think about because – by definition – when we do things “informally” we don’t give them a great deal of thought or lend them a great deal of importance. Which makes some of Allegra’s findings all the more remarkable …

Last year, consumers ate one in every eight meals out of the home. That’s 7.7 billion meals – a fact which means that the UK informal eating out market is currently estimated to be worth £40.3 billion. Add to that the fact that the sector now employs one in twenty of the UK workforce and it’s clear that we’re looking at an industry that demands a rather more “formal” assessment – which is exactly what Allegra did. They looked at the Gross Value Added (GVA) for the sector.

Introduced by the Office for National Statistics in 2005, GVA measures the contribution to the economy of UK industries And what Allegra found was that informal eating out is now one of the top-ten contributors to national GVA, contributing around the same amount to the economy as the computer services sector.

Furthermore, the report also highlighted that the informal eating out sector will play an important role in revitalisation of the high street, enhancing the overall shopping and leisure experience for consumers – and employing up to 70,000 more people over the next 5 years.

So, is this the season to be jolly?

I think it might be. Because, if the analysts have got it right, the anticipated festive spending spree in our shops and restaurants will be just what the economy needs to kick-start the recovery we’re all hoping for.

A recovery which for HR professionals will finally see the end of the daily deluge of depressing emails trying to sell us the services of doom – and herald in a future where we can begin to focus once again on the positive contribution HR can make to our organisations. In other words, the reason most of us got into HR in the first place.

Have a very happy Christmas.

Published in HR Magazine December 2009