Here’s a look at five COVID-19-related factors facing the foodservice industry.
As the number of COVID-19 cases continues to soar throughout much of the country, a ray of hope broke through the clouds this week as the first vaccines arrived and began finding their way into the arms of frontline workers. While such positive news represents a much needed shot in the arm, so to speak, for the beleaguered foodservice industry, the next few months will continue to be rife with challenges for operators and their supply chain partners as the worst may be yet to come. Here’s a look at five COVID-19-related factors facing the foodservice industry.
Consumer concerns over coronavirus cases: Consumers’ seemingly growing reliance on the various forms of off-premises service comes as their concern about COVID-19 continues to grow with the number of positive cases. In fact, 60% percent of consumers are very concerned about COVID-19, per a Dec. 4 study from Datassential. This is up 8% from the firm’s Nov. 19 study. And when concerns about the virus go up, consumers’ willingness to patronize restaurants goes down in a similar fashion. Along those lines, 49% of consumers say they will definitely avoid using restaurants, per that same Datassential study. And, to nobody’s surprise, this represents an 8% increase from the last time the Chicago-based research firm posed the question.
Consumers continue to carry out: In some respects, the restaurant industry continues to operate in parallel universes: there’s quick-service restaurants and there’s everyone else. For example, transactions at quick-service restaurants declined 7% in November compared to the same month in 2019, per data from The NPD Group. For restaurant operators in other segments, a 7% decline would be welcome news, but the fact remains many continue to see their transactions off by two to three times that amount. If there’s any silver lining in all of this, consumers continue to put their money where their mouths are. Most surveys show that consumers continue to be comfortable accessing restaurants via carryout, drive-thru and delivery. In fact, these various service approaches saw a 46% percent increase in consumer traffic in November compared to the same month in the previous year, per NPD. This growth could not completely offset the 53% decline in dine-in restaurant traffic for the month. “We should continue to expect drive-thru and delivery to be performance drivers for the best performing restaurant operators as consumers continue to shift meal occasions to the home,” says David Portalatin of the NPD Group.
When will consumers feel comfortable returning to dining on-premises? That’s a big question that Technomic tried to answer for the industry. The Chicago-based research firm reports 54% of consumers say it will be at least 6 months before they feel comfortable dining on-premises again. And 24% of consumers are not sure if they will ever be comfortable dining at restaurants again. The timeline to return to on-premises dining continues to grow longer, Technomic points out. In August, for example, only an average of 20% of consumers expressed uncertainty around returning to on-premises dining. Hopefully, the rollout of the vaccine will start to assuage people’s fears.
Totaling up the impact: Overall U.S. foodservice industry sales will decline by 26.4% in 2020, according to Technomic’s latest industry forecast. The 2020 outlook for restaurants and bars, the foodservice industry’s largest segment, is modestly less severe with total sales projected to fall by 20.3%. On a dollar basis, cumulative 2020 sales for the foodservice industry are expected to shrink by nearly $269 billion. To put this in perspective, in 2019, industry sales increased by more than $35 billion, growing 3.9% on an annual basis, per Technomic. These projections are relatively consistent with those developed by other industry organizations.
A new twist on food trucks: We all miss dining in restaurants. Almost everyone agrees with that sentiment. A couple in Lombard, Ill., decided they could no longer take not being able to dine at the restaurants of their choice so they turned their van into a mobile dining room, the Chicago Tribune reports. Since October, the two have been pulling into restaurant parking lots and eating their takeout at the table covered in a red-and-white checkered tablecloth in the back of their van. To help support the restaurants, they’ve been posting their date nights on Facebook and Instagram, logging their favorite dishes.
View this post on Instagram
