With Portugal introducing a wide range of measures to control the spread of COVID-19, including a nationwide lockdown, limited-service restaurants suffered a sharp decline in sales in 2020. Despite the period of great uncertainty and the difficulties imposed by the COVID-19 pandemic, limited-service restaurants saw a return to relatively strong current value growth in 2021, although due to the magnitude of the decline in 2020, sales were unable to return to the pre-pandemic level.
With its growth supported by franchising, from the early stages of its presence in the market McDonald’s became the favourite fast food brand amongst Portuguese consumers, and maintained its leading position in 2021. Its strong marketing campaigns, wide national coverage and low prices have earned the brand strong customer loyalty, whilst it has proven itself capable of adapting to increasingly demanding consumers, such as providing home delivery since the end of 2017.
The COVID-19 restrictions imposed on consumer foodservice led to a significant reduction in turnover in 2020. However, many entrepreneurs and chefs saw this as a business opportunity or reinvented themselves in 2020 and 2021.
Although limited-service restaurants was in the best position to quickly adapt to the changes brought about by the pandemic, with many players in the channel already present in takeaway or home delivery, value sales saw a double-digit decline in 2020, with the improvement in 2021 insufficient to offset the 2020 decline. However, with more rapid adaptation to the COVID-19 restrictions and the rollout of vaccination, limited-service restaurants is projected to reach the 2019 level of sales faster than the industry average, with sales in 2022 surpassing the 2019 values.
McDonald’s is expected to continue to invest in new outlet openings over the coming years, with an expansion plan of between five and eight restaurants per year for the next three to five years. Investment will probably go to larger and more isolated spaces, with enough room for a drive-through and a good area for a terrace, the preference for which increased during the pandemic, and this trend should continue.
Innovation and added-value products will bring dynamism to the market, with consumers looking for fresher products, higher quality and healthier meals as differentiating factors. However, convenience will continue to top consumers’ shopping lists, which will help delivery services and takeaway to remain highly popular.
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Limited-Service Restaurants (LSR) combine fast food and 100% home delivery/takeaway outlets. These outlets offer limited menus with items that can be prepared quickly. Customers typically order, pay, and pick up their order from a counter, though some outlets can have limited table service. This also includes 100% Home Delivery/Takeaway which provide no facilities for consumption on the premises. LSR tend to specialize in one or two main entrees such as hamburgers, pizza, or chicken, but they usually also provide drinks, salads, ice cream, dessert, etc. Food preparation is generally simple and involves one or two steps, allowing for kitchen staffs generally consisting of younger, unskilled workers rather than professional chefs. Other key characteristics include: • A standardised and restricted menu • Tight individual portion control on all ingredients and on the finished product • Individual packaging of each item • Counter service • For Chained Limited Service Restaurants, chained and franchised operations which operate under a uniform fascia and corporate identity • Any outlet offering full-service restaurant seating with servers would be excluded, even if delivery service is available.See All of Our Definitions
This report originates from Passport, our Fast Food research and analysis database.
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