Limited-Service Restaurants in Brazil

2020 IMPACT

Established delivery and takeaway infrastructure helps limited-service restaurants absorb some of the effects of Coronavirus (COVID-19)

With the first case of Coronavirus (COVID-19) in Brazil being diagnosed in late February 2020, the pandemic quickly escalated over following months, resulting in a staggering number of reported cases and one of the highest per capita death rates worldwide. The pandemic hit the country in waves, with São Paulo, Rio de Janeiro and Amazonas the first states to report high death tolls.

Limited-service restaurants benefits as consumers look for value for money foodservice options in a tough economic climate

Limited-service restaurants usually have mid-priced positioning and count on a more robust share of sales dedicated to drive-through, takeaway and home delivery. Thus, the direct impact of the COVID-19 crisis on system-wide sales and the outlet count was not as severe as in some other categories, where the experiential appeal of the eat-in service was directly impacted by quarantine restrictions.

Last-mile players adapt to preserve the importance of meal vouchers

Online ordering saw dynamic growth within sales of limited-service restaurants in 2020, in response to an increasing portion of home delivery transactions. Last-mile delivery players like iFood, Rappi and Uber Eats reported strong sales growth, as consumers adapted to social isolation measures and remote working through the year.

RECOVERY AND OPPORTUNITIES

Online ordering set to continue to lure consumers with convenience and incentives

Online ordering is expected to continue to offer important growth opportunities for limited-service restaurants in the forecast period. Consumers have become familiar with the process of ordering food through smartphone applications, and this new habit is set to become more widespread.

Close attention to packaging details required to ensure smooth delivery operations

With the mass vaccination programme expected to take longer than anticipated to complete in Brazil, consumers who acquired to habit of ordering food online will preserve that practice over the short to medium term. This will continue to benefit limited-service restaurants, especially chained players that can already count on an operational structure to support delivery activities.

Chicken limited-service restaurants set to continue to gain ground as consumers look for product-specific menus

Product-specific limited-service categories, such as chicken limited-service restaurants, are expected to gain ground over the forecast period. Chicken limited-service restaurants is still a fairly small category in Brazil, with a sparse population of independent players and few international chains.