Limited-Service Restaurants in Mexico

2020 IMPACT

Significant declines across the channel during pandemic, with eat-in losing notable value share to to-go options due to home seclusion trend

Limited-service restaurants in Mexico had been starting to gain momentum in terms of value sales, transaction and outlet growth pre-pandemic, driven by the entry of new brands and an increasing number of players within the Asian, pizza and burger categories offering accessible pricing strategies and promotional bundles to attract less affluent consumers, employees who eat away from home and younger consumers who look for the most affordable options. The emergence of the pandemic resulted in the government introducing lockdown restrictions for several months, which reduced footfall through this channel due to the closure of many businesses with remote working wherever possible in addition to home schooling.

Increasing costs of mainstream third party delivery apps encourage limited-service operators to look to other innovative options

While eat-in had continued to dominate value sales pre-pandemic, it was already losing ground to to-go options in Mexican limited-service restaurants due to the increasing popularity of consumers placing orders online through third party delivery platforms such as Uber Eats, SinDelantal and Rappi which tend to form partnerships with chained players. While home delivery and takeaway gained further dynamic value share in 2020 as eat-in options were significantly reduced, delivery apps have been increasing their commissions, forcing foodservice operators to increase their prices.

Highly fragmented competitive landscape with a number of chained brands performing well despite unfavourable environment

Limited-service restaurants in Mexico remained a highly fragmented competitive landscape in 2020, dominated by independent operators. However, the channel continued to be led by chained convenience store banner OXXO from FEMSA Comercio SA de CV, which despite the pandemic had continued to expand its vast outlet network at the end of the review period.

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