Executive Summary

The UK fast food and home delivery market was valued at £7.3bn in 2000 an increase of 4% over 1999. Healthy annual sales growth has been a feature of the sector in recent years, as higher disposable incomes have enabled consumers to spend more on eating out, and demands for convenience foods have grown. Store expansion by the leading fast food brands continues to be a key driver affecting annual sales growth.

The largest sector of the market is sandwiches. Sandwiches form a buoyant sector, recording one of the highest sales increases of all the sectors in 2000. The sandwich sector has benefited from a number of factors, including the growth in the number of office workers, shorter lunch breaks, demands for healthier foods and the development of a premium sandwich sector. The second-largest market sector is burgers. The burger market struggled in 1996 due to the BSE (bovine spongiform encephalopathy) crisis but, since then, annual sales growth has averaged around 6%, boosted by new store openings.

The pizza market has benefited from a period of rationalisation in both the eat-in and home delivery sectors. Menu diversification and new outlets have also helped to boost sales. The best performing sector in 2000 was chicken, which is often perceived as a healthy fast food option. Improvements to outlets, new larger outlets and attempts to attract more family diners have all helped sales. The fish and chips sector the traditional British takeaway continues to suffer from a fragmented structure, a lack of branding and continued competition from global fast food brands. Indian and Chinese takeaways form the largest subsectors in the `other fast food and takeaway outlets' sector. These outlets suffer from the same problems as the fish and chips sector. Developing subsectors in the `other fast food' category include coffee shops, soup bars and bagel outlets.

The fast food and takeaway market is dominated by global brands, led by McDonald's, Burger King, KFC and Pizza Hut. These brands have extended their store networks significantly in recent years. However, there are some national chains emerging in the UK, particularly in the sandwich sector. All these brands are benefiting from the demands for more convenience foods, and from the busy lifestyles that are reducing the time available for home food preparation.

The market is forecast to increase at approximately the same rate in 2001 as in 2000 and should experience steady annual growth up to 2005. An increasing number of working women, more dual-income families with children and more single-person households will be among the factors impacting on sales. Store expansion will continue and ordering via the Internet will become a feature of the market. The two sectors expected to show the strongest growth will be sandwiches and chicken. However, growing concerns about healthy eating and obesity, especially amongst children, could be factors weakening sales in the next few years.

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