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BY MICHAEL BARKER

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Foodservice spend down 80% in April

New figures show the scale of the task for the eating-out sector to recover from the impact of Covid-19

Foodservice spend down 80% in April

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Foodservice spend fell by 80 per cent in April compared to the previous year, underlining the scale of the damage done to the sector by the Covid-19 lockdown.

New figures from The NPD Group indicate that weekly spend in British foodservice in April 2020 was just over £200 million, compared with the £1 billion spent a year ago. The decline in British out-of-home foodservice visits in April was almost three times as severe as the collapse seen during the financial crisis of 2008-2010, the group said.

Lockdown officially started on 23 March, but many people were already avoiding eating out, meaning that by the end of the first quarter there was already a 10 per cent year-on-year decline in foodservice income. This accelerated dramatically in April and for the two-month period of March and April 2020 the fall was 54 per cent.

“The scale of the crash in out-of-home foodservice visits is unprecedented and the 80 per cent fall in spend underlines the severity of the collapse," said Dominic Allport, insights director (foodservice) at The NPD Group. "As we start to come out of lockdown, consumers are likely to be sensitive to prices and value for money. Value-related visits should increase rapidly in the same way as the 2008-2010 financial crisis when price-driven or voucher-driven visits rose sharply.

"We also expect deal-based visits to increase as they did in the financial crisis: they grew by over a quarter even though the overall market registered a two per cent visit decline. The importance of meal deals is likely to grow as operators fight for market share. Operators are now more savvy about these deals, and they know that consumers that buy on ‘value’ can often spend more if the product range and offering is right." 

Indeed, price and deal-related visits reached record levels in April, with more than 28 per cent of visits influenced by whether an outlet could offer a good price, the highest percentage ever seen in the month of April, including during the financial crisis. Visits made using a meal deal were also the highest ever seen for any April, at 32 per cent, and the average bill on deal was five per cent higher than average.

Allport sounded a noted of caution that the sector will take some time to recover. "While reopening and initial recovery is imminent, and the relaxation of social distancing is welcome, the eating-out industry has a huge task ahead if it is to return to anything like normal trading. The good news is this is an extremely innovative and creative sector, and we know it will adapt fast to create the ‘new normal’.”

 

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