The Contribution of the Takeaway Market to the UK Economy

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This report provides a snapshot of the valuable economic, social and cultural contribution made by the takeaway sector to the UK. Based on research conducted by Retail Economics (and Prevision), the report examines the entrepreneurial opportunity the sector presents, the huge steps takeaway restaurants have taken to respond to changing consumer appetites and the challenges posed by government regulation, which threatens to stifle a vibrant sector.

It uses industry-standard macroeconomic models to quantify the economic contribution of the UK takeaway sector to the UK economy. The models use data from the Office for National Statistics, the Business Register and Employment Survey, the Labour Force Survey, the Annual Survey of Hours and Earnings, HMRC and proprietary data from Retail Economics. Data was also supplied by Just Eat. A survey of 300 takeaway owners from across the UK was also conducted by Prevision. Interviews took place between the 10 July to the 24 July 2019.

Headline statistics

Over the last three years, the takeaway sector has been cooking on gas, growing at almost twice the rate of the overall economy, with total spending rising from £10.6 billion to £12.5 billion between 2015 and 2018. In response to consumer demand and to satisfy appetites, the number of dedicated takeaways is estimated to have risen from 30,189 in 2015 to 37,732 in 2018. Additionally, the average household spent £38 per month on takeaways in 2018, an increase of 15% since 2015, and such growth suggests people will only become hungry for more.

This increase in demand for takeaways is estimated to have added £5.9 billion in value to the UK economy in 2018 and £307 million in direct taxes to the UK Government. That figure leaps to £1.8 billion if we take indirect taxes like VAT and employee national insurance into account. Such is the explosive growth of the sector that measured by revenue, it is greater in size than the architecture and TV production industries.

Technology has been pivotal in the sector serving up a feast and has provided new and innovative routes to market for small, independent takeaway restaurants, with almost 35,000 takeaways and restaurants now using online apps.

Accordingly, the sector has responded quickly to changes in consumer appetites. Vegan orders have increased by 388% from 2016 to 2018, and with consumers more conscious about sustainability and industry practices that figure will likely increase. In that same time, Persian food has seen growth of 34% and Nepalese takeaway restaurants have increased by 16%.

Takeaways are one of the most ethnically diverse parts of the UK economy and the sector offers a gateway for would-be entrepreneurs, with 40% of takeaway owners considering themselves first-time entrepreneurs. The sector was also responsible for 286,798 jobs in 2018, an increase of 13,000 jobs since 2015, employing more people than the Telecoms, Advertising and Insurance sectors.

Interestingly, small businesses make up the majority of the sector and are growing with such ferocity that 30% of takeaways now employ more than ten people. What’s more, the creation of jobs doesn’t discriminate by region, with employment stretching the length and breadth of the UK. Since 2015, Yorkshire and Humber has seen the largest increase in job creation, followed closely by the East and West Midlands and the North East.

As well as providing a healthy serving of employment opportunities, the takeaway sector makes a vital contribution to the UK economy, accounting for a 12% slice of the food services industry pie, which includes restaurants, cafés, pubs, bars and events.

The takeaway market is set to expand further and grow at approximately 3.7% a year for the next five years, remaining an important source of revenue for the Government. Consumer appetites look like they’ll only get bigger too, with spending on takeaways forecast to rise to £15 billion by 2023, an increase of 20% on 2018, which will result in a value of £7.1 billion to the economy. 

Report recommendations

However, there are great challenges on the horizon for the takeaway sector with government legislation potentially stirring up trouble. A more in depth analysis is covered in the full report, where we look into seven recommendations that will ensure the sector continues to flourish, creating further job opportunities and allowing entrepreneurs to grow their businesses. Our recommendations look at the areas of skills, immigration and health, and they are:

• Mandated wages for T-level students during their industry placements

• Bring forward the Catering and Hospitality T-level to 2021

• Explore the feasibility of a grant to incentivise businesses to offer placements

• Reduce the salary threshold for chefs on the Shortage Occupation List

• Introduce the duration of short-term visas to two years

• Increase a medium and long-term strategic skills list

• Introduce an online calorie calculator as exists in Northern Ireland and Scotland

Our full report also contains a snapshot of the valuable economic, social and cultural contribution made by the takeaway sector to the UK, and examines the entrepreneurial opportunity the sector presents, and the huge steps takeaway restaurants have taken to respond to changing consumer appetites.

Download the full report for a feast of information...