Takeaway and food delivery services are having an increasingly significant impact on inflation

When we think of inflation, we often think of higher prices for energy, groceries and rent. But changes in our consumption patterns also play a role. It is important here to distinguish between a product or service’s weight in the consumption basket and its contribution to inflation. The weight indicates the average share of their budget that households spend on a given product category. The contribution to inflation reflects the extent to which price changes within that category affect overall inflation. A product category can therefore have a greater impact on inflation because households spend more money on products in that category, because the prices of those products rise more sharply, or both. Takeaway and food delivery services are a prime example of this. 

From a pandemic habit to a regular expense

The share of takeaway and food delivery services in households’ consumer spending has nearly doubled in recent years, from around 1.6% in 2015 to just over 3% today. This means that takeaway and food delivery services have come to play a more pronounced role in consumers’ spending patterns.

This development may be linked to the COVID-19 pandemic, during which more food outlets began offering takeaway and delivery services. As a result, many households became acquainted with online ordering platforms and food delivery services. Even after the pandemic had abated, people continued to avail themselves of the convenience at mealtimes. It seems that the demand for takeaway and food delivery services has remained elevated, as has the supply of these services.

Remote working may be another factor behind this development. People who go to the office less often tend to have lunch at home and are more likely to use takeaway or delivery services.

Moreover, the increase appears to be part of a wider trend in which households increasingly opt for meals prepared outside the home, whether in restaurants and through takeaway and food delivery services.

A larger contribution to inflation

The increase in the consumption of takeaway and food delivery services is also reflected in this product category’s contribution to inflation. Whereas this category typically contributed less than 0.1 percentage points to inflation on average prior to the pandemic, this figure rose to 0.35 percentage points in 2023. The contribution subsequently fell back to 0.13 percentage points. This is mainly because prices for takeaway and food delivery services have risen less sharply, and not because their share of total expenditure has fallen. Even so, their contribution to inflation remains higher than it was prior to 2020.

The rise in the contribution to inflation between 2020 and 2023 is mainly linked to the sharp price increases at takeaways and food delivery services. In recent years, these businesses have had to contend with higher labour costs, rising energy prices and more expensive food products. As these costs are partly passed on to consumers, takeaway and food delivery services have also become more expensive. Additionally, households have started to spend a larger share of their budget on these services. As a result, price changes in this category have a greater impact on overall inflation than previously.

A permanent part of the consumption basket

The larger share of takeaway and food delivery services in household expenditure shows that consumers are using these services more often than they did prior to the pandemic. As households spend a larger share of their total expenditure on these services, price changes in this category also have a greater impact on overall inflation. Combined with the sharp price rises of recent years, takeaway and food delivery services now make a greater contribution to inflation.

What began as a practical solution during the pandemic-era lockdowns seems to have become an integral part of everyday life for consumers and businesses. As a result, takeaway and food delivery services are also more clearly visible in the inflation figures.