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According to the Lumina Intelligence UK Foodservice Delivery market report, the market is set to value £14.4bn this year, with a growth rate of +7.8%.

The growth is underpinned by continued high inflation and increased fees across delivery platforms, as well as operators driving growth through upselling on third party platforms, rolling out further delivery services, and creating virtual and delivery-only brands.

The report also highlights that two in three foodservice channels have increased their share of the delivery market from 2017-2023F. Branded traditional fast food, branded restaurants, and pubs are expected to have led share growth in the market from small bases. Delivery has been crucial to brand strategies, with operators optimising site designs to maximise delivery revenue.

Deliveroo has increased its share of occasions year-on-year, driven by regional growth. Deliveroo’s growth of +1.1ppt to 17.2% has been driven by its new McDonald’s partnership, as well as the utilisation of data collected through its Editions business. Aggregators have increased profitability in 2022 through increasing fees, stacking, and streamlining head office operations.

Furthermore, four in five casual dining delivery brands work with multiple delivery aggregators. The majority of casual dining brands (77%) now offer a delivery service, with 82% partnering with more than one aggregator. As more operators add a delivery service, aggregators are increasing delivery fees and reducing minimum orders to allow for low ticket transactions.

The report concludes that foodservice delivery is set to continue to grow its share of the total eating out market, to 12.8% in 2026F. Channels including fast food, restaurants, coffee shops, and pubs are expected to see higher proportions of revenue coming through the delivery channel. Many growing channels are benefitting from relatively low-ticket offerings and growth opportunities across different day-parts.

(source: https://www.lumina-intelligence.com/)