Full-service restaurants witnessed a significantly weaker performance than limited-service restaurants during the pandemic, with sales diving sharply during the lockdown periods. The huge decline in sales can largely be attributed to customer traffic losses, as well as the closures of small chains and independent restaurants as indoor dining capacity in most provinces was reduced by at least 50%.
Outdoor dining provided temporary relief to full-service restaurants’ cash flow. Restaurants created or expanded outdoor dining sections to accommodate more customers with social distancing in the summer.
Full-service restaurants have been late adopters of food home delivery as on-premise dining is a crucial part of the consumer experience. Many full-service restaurants, especially independents, have been reluctant to use delivery platforms due to prohibitive commission fees, some as high as 30%.
Although full-service restaurants will return to strong double-digit constant 2020 value growth in 2021 and 2022, followed by good, if declining, rates over the remainder of the forecast period, actual value sales will not surpass pre-pandemic levels until 2025. The channel faces several unfavourable trends.
The number of independent full-service restaurants will continue to decline over the early part of the forecast period as seating capacity is unlikely to be restored to pre-pandemic levels, and these operators have less capital to stay afloat, with revenue only coming from takeaway and food home delivery. Some operators have countered this by offering meal kits and high-end grocery home deliveries, as, especially during the early stages of the pandemic, restaurants faced a sudden surplus of food with fewer customers to serve.
Even though full-service restaurants redoubled their efforts to provide food home delivery services during the pandemic, the share of online orders may begin to decline in 2021 as restrictions ease and the on-premise dining experience brings consumers back to restaurants. While certain aspects of pandemic-era dining are likely to remain in place into the future, such as browsing menus and ordering from QR codes, the overall dine-in experience is likely to return to relative normality as the vaccine programme begins to take effect.
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