The forecasts give manufacturers, wholesalers and operators a view of the challenges ahead and actionable insights to help with planning for both short-term and longer-term recovery.
The report examines the key challenges facing each sector:
- Healthcare, Education and Government-run Services: are likely to revert to pre-pandemic patterns with inflation driving growth.
- Staff Catering: will see some growth prompted by returning office workers. However, some businesses have removed facilities or remodelled to lower cost formats. With businesses facing increased costs there will be little desire to re-invest in the short-term.
- Pubs and Restaurants: will see recovery slow; mid-market operators will be squeezed as consumers eat out less or down-trade, yet high-end restaurants will be protected to an extent.
- Hotels and Leisure: will find recovery the most challenging as discretionary spend is scaled back by more consumers. Staycations will continue at higher than pre-pandemic levels due to pre-booking but international tourism will still be considerably reduced. Income from domestic and international business travellers will remain significantly depressed this year.
Nicola Knight, senior analyst and lead on the new forecasts and report, commented: “During the pandemic, we saw an unprecedented and accelerated level of diversification and innovation in the sector that enabled survival for some businesses. As the market recovers from the shockwaves of the last two years, there are a new set of challenges to face, such as the rising cost of living and inflation, and now, the significant implications of the war in Ukraine.
“Recovery will be at a slower pace than industry would have hoped. Our low-mid growth forecasts are most likely to play out, meaning that the market will not return to its pre-pandemic state until at least 2024. Recovery will also vary by sector and QSR is currently the driving force behind growth, offering a convenient, consistent and value-driven alternative to eating at home, providing the “lipstick effect” for consumers. That said, city-centre and transport hub focused brands will continue to chase 2019 sales levels.”
For more insight on the numbers, challenges and opportunities by sector, IGD invites manufacturers, wholesalers and operators to attend a free webinar.