What does "A discretionary 10% service charge will be added"

[curvey]

Is this compulsory or can I opt out of it - its at a rest Im staying at just for their lunch menu!

It means they will automatically add it onto your bill, but you do not have to pay it. They do it as it (mostly) guarantees the extra 10%, as most people just look at the bottom line and pay that amount. And sometimes even leave another tip, if they haven't noticed.