Cafés/Bars in the Czech Republic

2021 DEVELOPMENTS

Slow recovery for cafés/bars due to further restrictions in 2021 and limited food offer

Following significant declines experienced by the channel during 2020 as a result of the pandemic and various lockdowns and restrictions on mobility, the first half of 2021 was also difficult for cafés/bars in the Czech Republic as the country remained in lockdown with continued restrictions for consumer foodservice establishments until the May. Cafés/bars suffered the most as many of them do not have outdoor terraces, which were allowed to open as they enabled adequate social distancing, or more established online delivery services offered by limited-service or full-service restaurants.

Operators adapt by investing in alternative services

Cafés/bars is highly fragmented with independent operators, many of whom have limited resources and thus struggled to survive the downturn and failed to quickly adapt to changing consumer needs, resulting in sharper declines in both value sales and outlet terms in 2020. While chained operators were more likely to have adapted better to home delivery, leading to share gain for the latter, this service remained much less developed compared to competing channels such as limited-service restaurants, or indeed compared to the more established takeaway service offered by cafés/bars, and which doubled its share in 2020.

Bars/pubs impacted by further restrictions in 2021 following highest value sales declines the previous year

Bars/pubs, which traditionally holds the highest value share in the channel, was hit particularly hard by the pandemic, recording even steeper losses than cafés, due to social distancing measures and the limited capacity of outdoor terraces to house sufficient numbers of consumers in order to maintain a high enough level of sales. For clubs and traditional pubs, home delivery and takeaway is less of an option, as the main attraction of these venues amongst local consumers is to drink and socialise with others, with a low offer of food.

PROSPECTS AND OPPORTUNITIES

Earlier recovery predicted for chained operators

Café/bars is predicted to see a gradual improvement in terms of value sales, transactions and outlet numbers over the course of the forecast period, with value sales set to fully recover (at constant 2021 prices) by 2025. This slower recovery will be driven by the dominant independents, while chained operators are expected to return to pre-pandemic value sales levels by 2024 and in terms of outlet numbers by 2023.

Urban areas likely to offer more dynamic development compared to rural

Cafés/bars located in city centres are likely to recover quicker than rural areas as they can benefit from urban consumers wanting to go out in the evenings due to pent-up demand, alongside a return to physical shopping whereby consumers may wish to purchase coffee on-the-go. On the other hand, operators in rural areas and residential areas could suffer from consumers wanting to entertain at home as opposed to going out to socialise, particularly due to lingering concerns over disposable incomes.

Home delivery expected to further penetrate the channel

As noted with limited-service restaurants, while eat-in will continue to dominate value sales, consumer habits gleaned during the pandemic are likely to remain relevant over the forecast period. This means that cafés/bars will see the benefits from the growth of home delivery services, with the latter expected to record further dynamic growth, and while takeaway will lose some ground compared to the highs of 2020, its value share will remain higher than pre-pandemic levels.