Restaurants: Europe Foodservice On Track For Modest Spend Recovery in 2025 With Emerging Opportunities Ahead

Why it is the topic trending:

• Post-Pandemic Recovery Analysis: The European foodservice industry is navigating recovery after significant disruptions, making its current performance and future outlook a key topic for businesses in this sector and related industries.

• Economic Uncertainty Impact: The report addresses the influence of rising costs and economic uncertainty on consumer behavior and foodservice spending, which are critical concerns for industry stakeholders.

• Shifting Consumer Behavior: The analysis of evolving consumer habits, such as the growth of digital channels and snacking occasions, provides valuable insights into current trends and future opportunities.

• Insights into Major European Markets: The article breaks down the performance and trends in the Big 5 European markets (Great Britain, Germany, France, Italy, Spain), offering a comprehensive view of the regional nuances.

• Identification of Growth Drivers: The report highlights specific factors like digital channels, dinner occasions, promotions, and the return to office that are driving growth, which is essential information for businesses looking to capitalize on these opportunities.

Overview:

A recent report by Circana indicates a modest +1% growth in European foodservice spend during Q1 2025 across the Big 5 European markets. The industry is navigating a complex environment of rising costs, economic uncertainty, and shifting consumer behavior. While overall traffic declined by -1%, the increase in average check growth drove the spending increase. The report identifies several key growth drivers, including digital channels, dinner occasions, promotions, and the return to office. It also provides specific insights into the snacking trend in Great Britain, the growth of breakfast in Germany, the impact of global uncertainty in France, the consumer focus on convenience in Italy, and the increase in breakfast spending in Spain.

Detailed Findings:

• Overall European Market (Big 5):

  • Foodservice spend grew by +1% in Q1 2025.

  • Foodservice traffic declined by -1%.

  • Average restaurant check growth drove spending.

  • Key growth drivers include digital occasions (+7% traffic growth), dinner occasions (+1% growth), promotions (+2% growth in occasions), and return to office (+0.3% traffic growth in workplace/school canteens).

• Great Britain:

  • Snacking occasions show double-digit growth (afternoon +13%, evening +14%).

  • Younger consumers (25-34 year-olds) are primary drivers of snacking growth (+23% visits).

  • Over 50 million visits shifted from traditional meals to snacks.

• Germany:

  • Consumer spending grew by +2% in 2024, but guest visits declined by -2% due to VAT increase.

  • Breakfast is a growth driver, with +2% more visits in 2024, especially among young adults.

  • Shift in breakfast choices towards non-alcoholic drinks, baked goods, and healthy options; energy drinks replacing coffee among younger demographics.

• France:

  • Foodservice traffic declined by -1% in Q1 2025, but a +0.5% increase in average check offset some spending decline.

  • Digital occasions (delivery + click & collect) grew by +5% and represent 8% of traffic.

  • Lunch returned to growth in Q1 2025, driven by collective catering.

• Italy:

  • Visits declined by -0.7% in Q1 2025, with strong trading-down behavior.

  • Lunch and dinner occasions saw a -1.5% drop, while lower-spend occasions like breakfast grew.

  • Consumers favor chains and retail ready-to-eat products for convenience.

  • Restrictive driving/alcohol consumption measures impacted beverage sales.

• Spain:

  • Consumer spending increased by +1.5% in Q1 2025, driven by +2.1% average spend per visit, despite a -0.6% traffic decline.

  • Breakfast spending increased by over 11% due to return to office.

  • Adults over 35 without children increased foodservice spending by +3.7%.

Key Success Factors of Product (Trend):

• Adaptability to Digital Channels: Foodservice operators who successfully integrated and promoted digital ordering options (click & collect, delivery) saw traffic growth.

• Catering to Evolving Daypart Preferences: Focusing on dinner and breakfast occasions, which showed positive trends in some markets, proved beneficial.

• Strategic Use of Promotions: Offering promotions attracted price-sensitive consumers and drove increased foodservice occasions.

• Capitalizing on Return to Office: Foodservice locations near workplaces and schools benefited from increased traffic as return-to-office trends continued.

• Innovation in Snacking Options: Foodservice operators and FMCG brands that recognized and adapted to the growth of snacking, particularly among younger consumers, were well-positioned.

• Meeting Demand for Convenience: Providing convenient, ready-to-eat options appealed to consumers with busy lifestyles.

Key Takeaway:

The European foodservice industry is experiencing a modest recovery in spending, driven by strategic adaptations in digital offerings, daypart focus, promotional activities, and responses to evolving consumer habits such as the rise of snacking and the return to traditional work patterns. However, the environment remains competitive and influenced by economic uncertainties.

Main Trend: Navigating Economic Headwinds with Strategic Adaptations in European Foodservice

Description of the Trend (please name it):

Navigating Economic Headwinds with Strategic Adaptations in European Foodservice describes the current state of the European restaurant industry, characterized by a struggle to maintain traffic amidst economic pressures and cost-of-living crises. The trend highlights the strategic shifts and innovations adopted by foodservice operators to drive spending growth, focusing on digital engagement, daypart optimization, value offerings, and catering to evolving consumer behaviors such as the increased preference for snacking and convenient ready-to-eat options.

What is Consumer Motivation:

Consumer motivation stems from:

• Value Seeking: Amidst rising costs, consumers are increasingly price-sensitive and drawn to promotions and affordable options.

• Convenience: Busy lifestyles drive demand for convenient solutions like digital ordering and ready-to-eat products.

• Shifting Meal Occasions: Changes in work patterns and social habits are leading to a greater reliance on snacking and potentially different preferences for main meal occasions.

• Social Interaction: Despite economic pressures, consumers still seek out-of-home dining for social occasions, particularly dinner and breakfast in some markets.

• Health Considerations: Evidenced by the shift towards healthier breakfast alternatives in Germany.

What is Driving Trend:

The trend is driven by:

• Cost of Living Crisis: Economic pressures and inflation are impacting household spending and forcing consumers to be more selective with their foodservice choices.

• Economic Uncertainty: Broader economic instability affects consumer confidence and their willingness to spend on non-essential items like dining out.

• Rise of Digital Channels: The increasing adoption of online ordering and delivery services provides new avenues for foodservice consumption.

• Changing Work Patterns: Remote work and return-to-office trends influence dining habits and locations.

• Evolution of Social Norms: Shifting mealtime preferences and the rise of snacking as a more significant eating occasion.

What is Motivation Beyond the Trend:

Beyond the immediate economic and practical considerations, the motivation taps into a broader consumer desire for:

• Enjoyment and Experiences: Even with budget constraints, consumers still value the social and experiential aspects of dining out.

• Flexibility and Choice: Consumers appreciate having options that fit their varied schedules and preferences.

• Maintaining a Sense of Normalcy: Despite economic challenges, some level of out-of-home consumption may be desired to maintain familiar routines and social connections.

Description of Consumers Article is Referring To:

The article refers to a diverse range of European foodservice consumers across the Big 5 markets:

• Age: Includes younger consumers (25-34) driving snacking trends in the UK, young adults in Germany increasing breakfast consumption, and a general population impacted by economic pressures.

• Gender: No specific gender focus is mentioned; the trends likely affect both male and female consumers.

• Income: The cost-of-living crisis suggests a broad impact across income levels, with consumers becoming more value-conscious. However, certain trends like premium breakfast options might indicate some resilience in higher-income segments.

• Lifestyle: Includes individuals with flexible lifestyles and remote work driving snacking in the UK, busy professionals returning to offices impacting breakfast in Spain, and consumers valuing convenience and ready-to-eat options in Italy.

• Category Article is Referring Shopping Preferences: Consumers who utilize various foodservice channels, including quick-service restaurants, fast-casual, full-service restaurants, cafes, workplace/school canteens, and digital platforms (delivery, click & collect).

• Are they low, occasional or frequent category shoppers: The data shows a decline in traffic (-1%), suggesting consumers might be visiting less frequently overall, making them more occasional shoppers or more selective in their choices. However, specific segments like those driving breakfast and snacking might still be frequent shoppers for those occasions.

• General Shopping Preferences - How They Shop: They are increasingly utilizing digital channels for ordering, seeking value through promotions, prioritizing convenience and ready-to-eat options, and adapting their consumption patterns based on economic constraints and lifestyle changes.

Conclusions:

The European foodservice industry in early 2025 demonstrates resilience in the face of economic challenges, with spending modestly increasing despite a decline in traffic. Strategic adaptations focusing on digital engagement, daypart focus, promotions, and convenience are key drivers of this performance. However, the competitive landscape remains intense, and the industry's future growth will depend on its ability to continue navigating economic headwinds and effectively responding to evolving consumer behaviors across different European markets.

Implications for Brands:

• Prioritize Value Propositions: Emphasize affordability and offer attractive promotions to price-sensitive consumers.

• Invest in Digital Infrastructure: Enhance digital ordering platforms (apps, websites) and explore opportunities in digital food delivery.

• Innovate in Snacking Formats: Develop smaller product formats and all-day snack deals to cater to the growing snacking trend.

• Optimize Breakfast Offerings: Focus on breakfast menus, particularly in markets like Germany and Spain, and consider healthier alternatives to traditional options.

• Enhance Convenience Options: Expand ready-to-eat offerings and streamline processes for quick and easy ordering and pick-up.

Implication for Society:

• Impact of Economic Factors on Leisure Activities: The cost-of-living crisis is directly influencing how and how often people choose to eat out.

• Evolution of Food Consumption Patterns: Social and economic shifts are leading to changes in traditional meal structures and the rise of snacking.

• Role of Foodservice in Employment and Economy: The resilience of the foodservice sector, despite challenges, is important for employment and economic activity.

Implications for Consumers:

• More Value-Oriented Choices: Consumers may need to become more selective and prioritize value when dining out.

• Increased Reliance on Convenience: Busy lifestyles may lead to greater dependence on digital ordering and ready-to-eat options.

• Potential Shift in Social Dining Habits: Economic pressures could influence the frequency and nature of social gatherings at restaurants.

Implication for Future:

The European foodservice industry is likely to see continued modest growth in spending, contingent on economic recovery and sustained strategic adaptations by operators. The trends of digitalization, the significance of snacking, and the focus on value will likely persist and intensify. Foodservice businesses that remain agile, innovative, and deeply attuned to evolving consumer needs across different markets will be best positioned for success in the coming years.

Consumer Trend: Value-Driven Convenience in Foodservice

Detailed Description: Consumers in the European foodservice market are increasingly prioritizing value for money while also seeking convenient dining solutions. This trend is driven by economic pressures, leading consumers to be more selective about their spending and gravitating towards promotions, affordable options, and easily accessible meals through digital channels and ready-to-eat formats.

Consumer Sub Trend: Daypart Optimization (Dinner and Breakfast Focus)

Detailed Description: Consumers are showing distinct preferences for specific dayparts, with dinner remaining a resilient occasion and breakfast showing growth in certain markets. This sub-trend suggests that foodservice operators can strategically focus their offerings and promotions on these key times.

Big Social Trend: Adapting to Economic Uncertainty

Detailed Description: The broader social trend of consumers and businesses adapting their behaviors and strategies in response to ongoing economic uncertainty and cost-of-living challenges is significantly shaping the European foodservice market.

Worldwide Social Trend: Global Rise of Digital Food Consumption: The increasing adoption of digital channels for ordering and consuming food is a global phenomenon, reflected in the growth of digital occasions in the European foodservice market.

Social Drive: Balancing Needs and Constraints: The underlying social drive is the constant need for consumers to balance their desires for convenience, enjoyment, and social connection with the constraints of their budgets and time.

Learnings for Brands to Use in 2025 (bullets, detailed description):

• Data-Driven Decision Making: Utilize market data and consumer panel insights (like Circana's) to understand evolving trends and tailor strategies accordingly.

• Emphasize Digital Capabilities: Ensure robust and user-friendly digital ordering platforms are in place to cater to growing consumer demand for convenience.

• Strategic Promotion Planning: Develop targeted and attractive promotional offers to drive traffic and encourage spending among value-conscious consumers.

• Market-Specific Adaptations: Recognize the nuances in consumer behavior across different European markets and tailor offerings and strategies accordingly (e.g., focus on snacking in the UK, breakfast in Germany).

• Agility and Flexibility: Be prepared to adapt to ongoing economic uncertainties and shifts in consumer preferences with responsive menu offerings and service models.

Strategy Recommendations for Brands to Follow in 2025 (bullets, detail description):

• Implement Dynamic Pricing and Promotions: Utilize data to offer targeted promotions during off-peak hours or for specific menu items to maximize traffic and revenue.

• Enhance Mobile App Experiences: Invest in user-friendly mobile apps that offer seamless ordering, personalized recommendations, and exclusive deals.

• Develop and Market Value Meal Bundles: Create attractive meal bundles that provide consumers with a perception of getting more for their money.

• Optimize Menu Offerings for Key Dayparts: Tailor menus and promotions to capitalize on the growth in dinner and breakfast occasions in specific markets.

• Expand and Promote Convenient Takeaway and Delivery Options: Cater to the demand for convenience by offering a wide range of easily accessible takeaway and delivery services.

Final Sentence (key concept) describing main trend from article (which is a summary of all trends specified):

The European foodservice industry in 2025 is characterized by a cautious recovery in spending driven by strategic operator adaptations focusing on value, convenience, and digital engagement in response to persistent economic headwinds and evolving consumer behaviors.

What brands & companies should do in 2025 to benefit from trend and how to do it:

In 2025, foodservice brands and companies operating in Europe should strategically focus on:

• Deeply understanding the specific economic conditions and consumer behaviors within each of their target markets to tailor their offerings and strategies effectively.

• Prioritizing the development and optimization of their digital channels to meet the growing consumer preference for online ordering, delivery, and convenient access to their menus and promotions.

• Developing compelling value propositions and implementing targeted promotional strategies to attract and retain price-sensitive consumers navigating the ongoing cost-of-living crisis.

• Continuously analyzing sales data and consumer feedback to identify opportunities for menu innovation and daypart optimization, capitalizing on growing trends like snacking and breakfast in specific regions.

• Maintaining agility and flexibility in their business models to quickly adapt to any further economic shifts or changes in consumer preferences to ensure sustained growth and competitiveness.28

Final Note:

• Core Trend: Value-Driven Convenience in Foodservice: Consumers prioritize affordability and easy access to meals.

• Core Strategy: Strategic Adaptations to Economic Headwinds: Implementing flexible and responsive business strategies to navigate challenging economic conditions.

• Core Industry Trend: Digital Transformation and Daypart Optimization: The increasing importance of technology and focusing on key meal times in the foodservice sector.

• Core Consumer Motivation: Balancing Needs and Budget Constraints: Consumers seeking to satisfy their dining needs while managing their spending effectively.

• Final Conclusion: The European foodservice market in 2025 presents both challenges and opportunities, requiring brands to be strategic, adaptable, and intensely focused on delivering value and convenience through evolving channels to meet the changing needs of European consumers.

Core Trend Detailed: Value-Driven Convenience in Foodservice

• Description: This core trend highlights the increasing priority that European consumers place on obtaining good value for their money while also seeking convenient solutions when it comes to food consumption outside the home. Driven by economic pressures and busy lifestyles, consumers are carefully balancing their desire to enjoy meals and snacks away from home with the need to manage their budgets effectively and access food options that fit seamlessly into their daily routines. This trend is evident in the popularity of promotions, the growth of digital ordering for ease and speed, and the preference for ready-to-eat options that require minimal effort.

• Key Characteristics of the Trend (summary):

  • Price Sensitivity: Consumers are highly aware of the cost of foodservice and actively seek out deals and promotions.

  • Emphasis on Affordability: There's a preference for menu items and meal solutions that are perceived as good value for their price.

  • Demand for Speed and Efficiency: Consumers want quick service and convenient ordering and pick-up options to fit their busy schedules.

  • Reliance on Digital Platforms: Online ordering and delivery services are increasingly popular for their convenience and accessibility.

  • Preference for Ready-to-Eat Solutions: Consumers often opt for pre-prepared meals and snacks that require minimal or no preparation time.

• Market and Cultural Signals Supporting the Trend (summary):

  • Circana Report Findings: The report highlights the growth in promotional occasions and the consumer focus on lower-priced items and ready-to-eat options, indicating a value-driven mindset.

  • Increased Use of Restaurant Apps and Online Delivery: The growth in digital occasions across Europe demonstrates the consumer demand for convenient ordering methods.

  • Expansion of Convenience Retail Foodservice: The success of ready-to-eat food in regular retail outlets in France points to the value placed on convenience.

  • Trading-Down Behavior in Italy: Consumers opting for lower-priced products like coffee and baked goods over more expensive meal components illustrates a focus on affordability.

  • Growth of Snacking: The rise in snacking occasions in the UK, often driven by affordability and flexible lifestyles, further supports the value-convenience nexus.

• How the Trend Is Changing Consumer Behavior (summary):

  • More Selective Out-of-Home Dining: Consumers are likely to be more discerning about when and where they choose to eat out, prioritizing value and necessity over spontaneous dining.

  • Increased Use of Discounts and Loyalty Programs: Consumers are actively seeking and utilizing promotions and loyalty programs to save money on foodservice purchases.

  • Greater Adoption of Digital Ordering: Online platforms are becoming the preferred method for ordering food due to their convenience and often exclusive deals.

  • Preference for Efficient Meal Solutions: Consumers are opting for quick and easy meal options that minimize time spent on preparation.

  • Potentially Reduced Spending per Visit: While average checks might increase due to price growth, consumers may be ordering fewer items or choosing lower-priced options within their visits.

• Implications Across the Ecosystem (summary):

  • For Brands and CPGs: Need to develop and market products that offer a strong value proposition and cater to convenience-seeking consumers, including ready-to-eat formats and ingredients for quick at-home meals.

  • For Retailers: Opportunity to expand their ready-to-eat sections and partner with foodservice operators to offer convenient meal solutions. Implementing strong digital ordering platforms and loyalty programs is also crucial.

  • For Consumers: Benefit from a wider range of affordable and convenient foodservice options but may need to be more mindful of their spending and potentially adjust their dining habits.

• Strategic Forecast: The trend of value-driven convenience is expected to persist and potentially intensify in the European foodservice market. Economic uncertainties are likely to continue influencing consumer spending habits, making affordability a key factor. The demand for convenience, fueled by busy lifestyles and technological advancements, will also continue to drive the popularity of digital ordering and ready-to-eat options. Foodservice operators who can effectively cater to this dual demand will be best positioned for success.

• Final Thought: In the current European climate, the foodservice industry is heavily shaped by consumers seeking the optimal balance between affordability and ease, making value-driven convenience a paramount consideration for all stakeholders in the sector.

Source: https://www.circana.com/post/europe-foodservice-on-track-for-modest-spend-recovery-in-2025-with-emerging-opportunities-ahead