Limited-service restaurants recorded a partial recovery in terms of value sales and transactions in 2021 following the significant declines experienced by the channel the previous year as a result of the pandemic, when COVID-19 lockdowns and restrictive measures had an overall negative impact on traditionally dominant eat-in sales. Despite the period of great uncertainty and difficulties imposed by the pandemic, limited-service restaurants recorded relatively dynamic growth in 2021, with value sales remaining only marginally lower than 2019 levels, supported by a gradual resumption of out-of-home activities, further demand for home delivery and new outlet openings by chained players.
Despite marginal loss of value share to eat-in in line with greater mobility outside of the home, the growth of home delivery via limited-service restaurants also continued in 2021, even during periods when restrictions were lifted. An increasing number of operators now offer home delivery as a result of surging demand driven by the pandemic, either through their own services or through partnerships with third party platforms such as Wolt and Bolt Food.
McDonald's CR spol sro maintained its lead in value share terms of limited-service restaurants in 2021, although the player continued to rank fifth in outlet terms. While KFC overtook McDonald’s in terms of number of outlets in 2019, due to the aggressive expansion activities of its master franchisee, AmRest, which also owns its other operated brand, Pizza Hut Express, McDonald’s, like many of its closest rivals, has continued to gradually open new locations despite the uncertain environment created by the pandemic.
Although limited-service restaurants as a channel was in the best position to quickly adapt to changes brought about by the pandemic with many of the players already offering takeaway or home delivery options, value sales recorded a double-digit decline in 2020, with 2021’s improvements not substantial enough to fully recover to 2019 levels. Nevertheless, with a more rapid adaptation to pandemic constraints, limited-service restaurants is projected to fully recover to 2019 value sales levels (at constant 2021 prices) by 2022, faster than the industry average.
While eat-in is predicted to gradually regain some share following the notable switch to takeaway, home delivery and drive-through within limited-service restaurants over the course of the forecast period, the value share held by the latter three services is predicted to remain above pre-pandemic levels due to newfound habits in the Czech Republic. The pandemic accelerated the adoption and use of foodservice offerings such as self-order kiosks, drive-through, and click-and-collect services, which were already emerging over the review period, and will continue to appeal.
Franchising is set to rise in popularity as a way to expand outlet networks, with an increasing number of international chains expected to choose this model over the forecast period. During times of crisis, franchising provides a safety net (in terms of legal advice, recognised and trusted brand name, and financial benefits) than independent players can traditionally rely on.
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Fast Food
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.
This report originates from Passport, our Fast Food research and analysis database.
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