Let’s start with some positives as the sector gears up for Christmas. CACI’s latest Voice of the Nation research reveals that Christmas socialising out of the home will be more important this year, with 51% of consumers emphasising its importance compared with 47% when asked at the same time last year. This is driven by an increase in this response by the key younger socialising groups – Generation Z (up five percentage points) and millennials (up six percentage points).

Interestingly, this perceived interest in going out does not reflect a change in economic confidence since last year. Consumers still have a similar level of concern about the cost of socialising, food and drink compared with last year. This implies that the expectation of high costs has become normalised, and young adults feel they just need to have some fun.

Assuming these sentiments play out, the leisure sector should be looking forward to a substantially better Christmas season than in 2022 and slightly better than in 2023, with levels of concern in 2024 in the double-digit percentage points lower than during the festive periods of the years prior. This is much needed good news for the sector after the cost pressures of the recent Budget and a tough run of sales, with CACI’s Brand Dimensions tracker showing year-on-year sales down 7% in restaurants and 10% in pubs and bars over the latest quarter.

A big name that could use some holiday cheer is Pret A Manger, which faced backlash in the summer when it announced major changes to its popular Club Pret service. Now that the changes have begun filtering through, we can see the significant impact they are having on sales, transactions and key customer groups. 

Starting with total year-on-year sales, Pret has seen a drop of 4% in the last quarter, against a cafes and coffee shops sector that has seen a rise of 3%. This suggests a loss in market share for the company beginning in July due to the announcement through September when the changes went into effect, despite various incentives for customers to stay with it.

The starkest impact has been on Pret’s online spend, as most Club Pret members will have managed their membership in the app or on the website. In September, Pret’s online spend fell by a massive 81%, following an initial drop of 11% in August. This may partly be due to the monthly membership becoming cheaper to reflect the more limited offering, highlighted in the online average transaction value (ATV) plummeting from £29 in August to £8 in September. The trouble is, the number of online transactions in September also fell by 28% compared with September 2023.

This has not only cost Pret loyal customers online, but those that it has retained are now spending £21 less per transaction. As a result, its online revenue, which contributed 9% of sales at its peak in March this year, has dropped to less than 2% in September. While its online sales volumes were already lower than Starbucks, they have now dropped below rivals Caffe Nero and Costa Coffee.

It would appear that Pret was banking on its core customer groups remaining loyal and starting to spend more in its stores. However, Brand Dimensions tells a different story.

Pret’s in-store sales dropped year-on-year by 5% in August and a further 2% in September, while its main competitors saw an in-store rise of 3% in August and just a 1% drop in September. This caused Pret to underperform the wider in-store market, reflecting a 7% and 2% drop in transactions in the same months and the largest in-store fall in ATV of any of its major rivals.

The Club Pret changes have also run the risk of alienating the company’s most loyal customers. In its core London market, just over 50% of Pret’s online sales in September 2023 came from three of CACI’s Acorn groups (Prosperous Professionals, Up and Coming Urbanites and Tenant Living). Within a year, the share of Pret’s online sales attributed to these groups dropped by five percentage points, showing that it has lost a disproportionate number of these key, high-spending customers. 

Their subscriptions are not all it has seemingly lost. Our findings have shown a small but measurable drop in the share of in-store spend coming from Up and Coming Urbanites and Tenant Living, which is not offset by the marginal increase in the proportion attributed to Prosperous Professionals. This suggests that Pret has also lost a disproportionate number of its core customers from spending in its stores. All of this adds up to that headline short-term drop in share, but also a potential long-term challenge to win back the loyalty of its core customers in an increasingly competitive market. 

There is no doubt that the thought process around amending a membership service that had become too good to be true for some customers and too expensive to be profitable for Pret would have been an extensive one. However, the outcome can serve as a cautionary tale to any organisation trying to buy loyalty when times are tough – as it is a habit that is incredibly hard to break.

About five years ago, I found myself at an industry event, a three-course, Central London hotel, black-tie kind of event, standing in the ladies toilets staring at my chest in horror. I was wearing a strapless black dress, and my chest and neck had broken out into what I can only describe as a bright red, burn-like rash that was itching so much I was using my hands to splash cold water over myself. Turns out I have an allergy to fish sauce. Not fish, not shellfish, specifically fish sauce. I headed home and, thankfully, by the following morning, was fully recovered – just a few explanations to be made and a trip to the dry cleaners.

 

As we move into the festive period, when staff resource is more stretched and operators are under pressure to get increased numbers of covers out in a timely manner, I’m reminded of that night in Park Lane and I’m grateful that it was nothing more serious than a rather odd allergy, albeit somewhat awkwardly discovered. It could have been far more serious – KAM’s latest research in conjunction with Polaris Elements has revealed that one-in-three customers with allergies or intolerances have been put at risk while dining out by being given the wrong information regarding allergens or served food that contained items that they are allergic or intolerant to.

 

Not only is this bad for customers, it’s also bad for business as more than half of these consumers would not go back to a venue where this had happened to them. Trust is so hard to come by, so easy to break and so very hard to win back.

 

Having a food allergy or intolerance means consumers are more likely to do their homework before visiting a venue, and this especially rings true for those with more serious allergies. Around 60% of people research menus and allergen details online before visiting, typically preferring the venue’s own website (71%). Yet, only 31% of operators display detailed allergen information online. This mismatch matters – if allergen information isn’t easy to find, 40% of customers say they’re unlikely to visit, which could mean lost business for those who don’t display it and potential new business for those who do. 

 

But people with food allergies or intolerances simply don’t eat out very often, do they? Wrong. They do – 66% eat out, whether at a pub, restaurant, coffee shop or quick service venue, at least weekly, and 77% have tried a new place in the past three months. But we must, as an industry, make sure that we are providing those people with a safe, easy, transparent experience. One-in-five say they feel awkward raising the issue of their allergies or intolerances – that old British thing of not wanting to make a fuss, I guess.

 

The positive news is that 93% of venues provide formal allergen training, but is it working? Four-in-five operators say that the responsibility is placed on their staff “to a great extent” to ensure customers are given correct information, and nearly all are confident their staff can appropriately deal with allergen requests from consumers. So, why are a third telling us that something went wrong on their visit to a pub, bar or restaurant? 

 

The hospitality industry is facing increasing demands for transparency and accuracy around food allergens and intolerances. According to a recent report from the Food Standards Agency, approximately 6% of the UK population are affected by clinically confirmed food allergies, and a further 600,000 with coeliac disease. Quite rightly, consumer expectations are rising.

 

In recent years, the focus on this area of hospitality has certainly been increased – unfortunately, due to some high-profile tragedies – but there is still work to do. We absolutely must get this part of our service right. This is not just about customer experience; this is about customer safety. We wouldn’t neglect to fit batteries in our venue’s smoke alarms, or chain our fire exits shut; we really should be treating customer allergies and intolerances with the same seriousness – lives are literally at stake if we don’t. 

 

And, if we provide a safe space for those with specific dietary needs, not only are we democratising access to food and drink out of home, but we are also doing something that is good for business. Those with allergies and intolerances are more likely to be loyal to an operator where they know they can trust that the information they have been given is correct. 

 

The hospitality industry is facing rising pressures from increasing labour costs, national insurance changes and a challenging economic landscape. In response, many pub and hospitality operators understandably look to their security/cleaning/entertainment supply chains for savings, often renegotiating contracts or reducing supplier margins. While this can deliver short-term relief, it may not fully address the deeper inefficiencies that drive costs.

 

We believe there is a better way. By focusing on optimising supply chain efficiency, operators can unlock greater savings, strengthen supplier relationships and maintain service quality, all while positioning their businesses for long-term success. Providers will naturally shudder at the mention of “efficiency” from a client, fearing cost-cutting measures that squeeze margins and compromise service. However, efficiency can be a win-win opportunity when approached collaboratively.

 

By working together to streamline processes and eliminate inefficiencies, providers gain across their wider business. This results in improved margins, as time and resources previously spent on lower-performing staff, who often consume disproportionate attention, are redirected toward value-adding activities. The outcome is not just a leaner, more productive operation, but also improved service delivery and enhanced reputation.

 

Third-party labour supply chains, covering cleaning, security and entertainment, often harbour inefficiencies that go unnoticed but have a significant impact on costs. These inefficiencies present opportunities for improvement. For example, many operators face overpayment issues due to unverified labour hours, where inaccurate billing and hours not worked are still being charged. 

 

GPS and automated attendance systems can address this by ensuring only verified hours are paid. Similarly, ensuring that staff are billed at the correct rates for the roles they are assigned is critical. Errors in assigning rates – for example, charging for higher-skilled roles than what is actually provided – can inflate costs unnecessarily. Regular audits of billing and staff assignments help ensure accuracy and fairness in charges.

 

Supplier onboarding is another area of concern. Slow, inconsistent processes can disrupt operations and increase compliance risks. Streamlining onboarding practices keeps venues operational and ensures suppliers are up and running faster.

 

Staffing mismatches are also a major inefficiency. Overstaffing during quiet periods leads to wasted resources, while understaffing during peak times diminishes customer satisfaction. Data-driven demand forecasting can help optimise labour allocation, reducing unnecessary costs while meeting customer expectations.

 

Addressing these inefficiencies allows operators to achieve cost savings without compromising service delivery or supplier relationships.

 

Focusing on efficiency in the supply chain delivers far-reaching benefits to pub and hospitality operators. By validating hours worked, automating compliance tracking and ensuring appropriate rates are charged for staff in their assigned roles, operators can eliminate fraudulent or inaccurate invoices, providing immediate savings and greater financial accuracy. Streamlining processes allows suppliers to concentrate on delivering exceptional cleaning, security or entertainment services, improving service quality.

 

Efficient systems also create operational resilience, enabling businesses to respond quickly to challenges and maintain continuity of service during economic pressures. By fostering a partnership approach, operators strengthen supplier relationships, creating trust and accountability that benefits both parties. These outcomes position operators to maintain high standards while achieving sustainable financial savings.

 

While renegotiating supplier margins may seem like the most direct path to savings, it carries risks if overused. Suppliers operating on tighter margins may struggle to deliver consistent quality or meet compliance requirements. For instance, lapses in right-to-work checks or licensing could result in hefty fines and reputational harm for operators. Instead of focusing solely on margins, operators can achieve greater value by addressing inefficiencies. Leveraging tools to improve visibility, compliance and resource management reduces waste and optimises supplier performance without compromising quality or relationships.

 

Efficiency begins with adopting smarter processes and technology.

• Automating time tracking with GPS ensures accuracy, eliminates billing errors, and guarantees compliance.

• Simplified onboarding processes, coupled with real-time data sharing, reduces delays and ensure suppliers meet all legal and contractual requirements.

• Ensuring staff are billed at the correct rates for their roles further prevents cost inflation caused by rate discrepancies or misallocations.

• Advanced analytics for demand planning help align staffing with customer demand, avoiding overstaffing during quiet periods or understaffing during busy times.

• Outsourcing third-party supply management to allow your business to focus on your direct staff.

 

These tools allow businesses to better allocate resources, maximising both cost efficiency and customer satisfaction. By implementing these practices, operators achieve measurable savings while empowering suppliers to focus on delivering their best work.

 

Suppliers are vital partners in delivering exceptional customer experiences. By fostering collaboration and transparency, operators enable suppliers to focus on quality and performance, reducing administrative burdens and enhancing overall value. This mutual support not only creates a more reliable and efficient supply chain, but also helps suppliers lower their own costs, maintain high standards and improve resilience.

 

As the hospitality industry faces rising costs, optimising supply chain efficiency provides a smarter alternative to simply renegotiating margins. This approach delivers sustainable benefits, including cost savings, enhanced compliance and improved customer satisfaction. By prioritising smarter supply chain management and fostering strong partnerships, businesses can navigate economic challenges while preserving the exceptional service their customers expect. Now is the time to invest in efficiency and unlock the full potential of your supply chain.

 

As we look to the future of foodservice, we find ourselves at a pivotal moment. The past few years have challenged us, disrupted our norms and reshaped consumer behaviours. Yet, as we anticipate 2025, it’s clear the industry is poised for growth, innovation and transformation.

 

The trends shaping the sector are not just responses to past challenges, but forward-looking transformations that align with evolving consumer desires and global realities. From embracing diverse culinary traditions to leveraging technology and sustainability, the foodservice landscape is becoming richer and more dynamic.

 

As borders blur in a digital world, curiosity about global flavours is on the rise. Consumers want to explore different cuisines and are increasingly interested in diverse and authentic flavours.

 

Global flavours are becoming increasing popular, and consumers are wanting to try and explore new and exciting flavours from around the globe when they are going out to eat.

 

By 2025, global flavours will not only be common in menus, they will be expected. From warming Turkish spices and fresh Greek herbs to flavourful Portuguese piri piri chicken, the demand for variety and authenticity in flavour profiles will shape restaurant offerings.

 

The pandemic accelerated the evolution of dining beyond the traditional restaurant setting, and by 2025, this hybrid model will become the norm. With consumers demanding more flexibility and convenience, hybrid models will dominate.

 

However, it is key for restaurants to ensure the transition between dine-in and takeout is seamless, and that quality and convenience is simultaneous across all platforms to meet customers’ expectations. 

 

Ghost kitchens, drive-thru lanes for quick pick-ups and on-demand delivery will continue to reshape the way we approach dining. However, quality and experience will remain paramount, with a strong emphasis on ensuring that off-premise meals are just as delicious and fresh as those served in-house.

 

Technology is transforming how consumers interact with food, and by 2025, it will enable personalisation on a new level. Personalisation, driven by advances in artificial intelligence (AI) and data analytics, will define how customers engage with menus and brands. 

 

Loyalty programmes will evolve from simple rewards into deeply personalised experiences. For instance, diners could receive custom menu suggestions based on previous orders or even have the option to tweak dishes to align with their health goals. 

 

Innovations like smart ordering systems, loyalty apps and data analytics will enable foodservice providers to cater more precisely to their customers’ tastes and needs and allow consumers to have an experience tailored to their dietary preferences, health goals and even mood.

 

Sustainability is no longer a niche interest; it’s a global movement. As climate concerns grow, so does consumer interest in sustainable and plant-based diets.

 

In 2025, we expect that plant-forward options will be mainstream across menus, from fine dining to quick-service restaurants. This shift isn’t just about adding plant-based options to the menu; it’s about creating a more eco-conscious supply chain from farm to plate.

 

The foodservice industry of 2025 will be defined by its ability to adapt and innovate in the face of changing consumer expectations and global challenges. The rise of global flavours reflects a world more interconnected than ever, while hybrid dining models cater to an on-the-go lifestyle without sacrificing quality. Technology is unlocking new levels of personalisation and sustainability has evolved from a trend to a business imperative.

 

At its core, the industry’s transformation is about meeting consumers where they are – whether that’s through a plant-based starter, a globally inspired dish or an AI-driven menu recommendation. As we prepare for the future, one thing is clear: foodservice is not just about feeding people; it’s about creating meaningful, memorable and responsible dining experiences. Businesses that embrace this vision will not only survive – they’ll thrive.