Limited-Service Restaurants in Latin America

Delivery

This report comes in PPT.

Key findings

Limited-service categories are able to manage demand in times of economic uncertainty

The economic instability of several countries in the region has pushed limited-service restaurants to align their offer with the needs of price-sensitive consumers from all socioeconomic levels, adapting their menus to provide high-quality food at affordable prices. Many consumers are trading down from higher priced options, although some are trading up, looking for added value in meals but still at a low price.

Chained and independent operators turn to delivery to stay afloat

Due to social distancing restrictions in physical outlets, restaurants turned to delivery apps in order to maximise exposure. Restaurants are dealing with new challenges: price competition, logistics and high delivery commissions. According to Euromonitor International's 2020 Lifestyle survey, 29% of Latin Americans ordered food for delivery weekly in 2020, up from 26% in 2019.

Locations with high traffic are most affected by the pandemic

Reduced travel, in addition to prolonged quarantines in several markets, have hit foodservice hot spots, such as shopping centres and financial districts. Only a slow recovery is projected, with outlets having to operate only through delivery and takeaway, or with very limited dine-in capacity.

Chains gain momentum in a highly fragmented market

Local independent stand-alone restaurants dominate in the region, and have been one of the main drivers of growth for foodservice aggregator platforms during the pandemic, as they use these platforms to compete with chained operators. Despite their efforts, many stand-alone outlets ceased operations during 2020, and chains have gained momentum in some markets, extending operations to mid-sized cities, as well as expanding through franchise models.