The foodservice market is showing slow but encouraging signs of a recovery, new figures suggest.
According to information company The NPD Group, weekly spend to the end of week 28 (Sunday 12 July) recovered to 50 per cent of the levels seen before the Covid-19 lockdown. That represents an improvement of 30 percentage points since lockdown in late March.
Dinner shows the strongest recovery, with weekly spend now at almost two-thirds (64 per cent) of pre-lockdown levels, in contrast to the late March low of 29 per cent. This improved performance for dinner is supported by the continued strength of delivery, which grew during lockdown and is now still 60 per cent higher in spend terms than it was before the lockdown.
Activity is on the increase at weekends as people grasp the opportunity to socialise again. In the three weeks since the end of June, weekend spend has doubled from 29 per cent of pre-lockdown to 57 per cent.
Recovery is more evident among younger consumers. Back in March and April, spend among consumers aged 16 to 34 decreased more slowly than for older age groups and is now also recovering faster. For those aged 16 to 24, spend is now at 45 per cent of pre-lockdown and for the 25 to 34 age group it is at 51 per cent.
Among those aged 55 or over, spend is still less than 25 per cent of pre-Covid levels, although this is up from the nine per cent seen in late March. Spend motivated by the desire for a ‘treat’ has increased sharply and at the beginning of July had recovered to 70 per cent of pre-lockdown levels.
Dominic Allport, insights director (foodservice) at The NPD Group, said: “While this data on spending shows evidence of some recovery in British foodservice, it is not clear if this reflects the start of a sustainable improvement or the short-term satisfaction of pent-up demand following relaxation measures. Perspex screens, hand sanitisers, masks, gloves, social distancing messaging and other initiatives underline that the British foodservice experience has changed. But it also shows this industry is working hard to recover. These tentative signs of improvement are welcome and foodservice operators will want to build on this.”
Dining in still more popular than dining out
The gap between eating out in a foodservice venue and buying prepared food to eat at home is still wide, indicating reluctance among some consumers to eat or drink inside foodservice establishments. Just before the Saturday 4 July relaxation in England, spend associated with eating at home was one third (34 per cent) above pre-lockdown levels. Spend for eating out in a venue is still low and as of Sunday 12 July was 77 per cent below levels seen before lockdown.
Allport explained: “Treating could be an indication that consumers have grown impatient with lockdown and the restrictions associated with it. Operators can tap into this desire for a personal or family treat by offering choice or value to encourage repeat visits. The prevalence of eating prepared food at home is further evidence that some consumers simply aren’t ready to eat out. That’s not surprising given the impact of the lockdown on people’s psyche, especially older people or those who have underlying health conditions.”
Looking ahead, the NPD Group says that as more Brits choose a staycation there will inevitably be more customers for the foodservice industry. The ‘Eat Out to Help Out’ scheme might boost visits, but its short-term validity won’t allow it to have a big impact. However, the VAT tax cut from 20 per cent to 5 per cent that applies to hospitality and tourism until January 2021 means that with prices already falling it’s likely to provide much-needed stimulus as operators pass on lower prices to consumers.
