Out of home versus in-home
How have they performed and how will inflation affect the relationship this year?
Out of home consumption recovered well in 2021 but was still well below pre-pandemic levels
Whilst the in-home grocery market in 2021 was, as expected, only slightly above 2020, it remains much higher than 2019. Post Covid losses for out-of-home have been partly recovered but still remained about 20% below 2019
As forecast the FMCG market in 2021 was 2% ahead of 2020 – 2022 is now expected to be 3% higher than 2021 due to inflationary pressures
Previously we had forecast stability for FMCG in 2022 but I have revised this to include new estimates for Food price inflation which is currently expected to reach 8% before dropping back later in the year – although with current events this could continue for longer
Based on the financial crisis of 2008 and subsequent economic downturn, out of home consumption will struggle in the short term to regain losses due to the pandemic
As economies develop, Food & Beverages typically drops as a proportion of Household spend. From 2008-2013 FMCG benefited as consumers focused on essentials (see Pick of the Week 22nd February) and its share stabilised. However, hotels & restaurants consistently lost share over this period and any lengthy downturn or high inflation now, could lead to a similar outcome.
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