The Impact of Coronavirus on Consumer Foodservice

April 2020

Whilst the Coronavirus (COVID-19) pandemic is expected to impact nearly every industry, the damage wrought to the global consumer foodservice industry is projected to be especially severe, with social distancing regulations closing millions of restaurants globally. This report discusses the post-COVID-19 outlook for consumer foodservice, with a special focus on demand scenarios and long-term consumer shifts.

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Key Findings

An unprecedented event for consumer foodservice operators

By far and away the worst crisis to impact the consumer foodservice industry in the post World War II era, COVID-19 has already shut down millions of restaurants globally, with a significant percentage unlikely to reopen.

Eat-in service goes dark

Although every category will feel the impact of the crisis, eat-in traffic has been completely banned in many markets, and is expected to remain subject to serious restrictions throughout 2020.

Supply and demand shocks to have lasting impact

Whilst the current crisis is likely to exceed the impact of 2008-2009 by some distance, the example of especially hard-hit markets from that period, such as Greece, suggest that a V-shaped recovery is unlikely, particularly if the crisis drives a significant contraction in the current outlet base.

Delivery/takeaway is no panacea

Early discussions of the crisis have focused on the utility of delivery by consumers under lockdown, whilst most local regulations have allowed delivery and takeaway services to continue. Yet, delivery aggregators have seen significant pullbacks in demand, suggesting a large-scale shift away from foodservice occasions.

A reshaped industry likely to emerge

Optimisation for delivery, multiple revenue streams, and broader retail foodservice coverage is likely for operators that survive, whilst consumers’ relationship with cooking is set to shift under prolonged periods of enforced social distancing. Foodservice in restaurants is set to contract sharply, possibly permanently; yet, the future for prepared food with some kind of service attached is notably brighter.

 

Introduction

Scope
Key findings
COVID-19 in context
Consumer foodservice and COVID-19
COVID-19 and 2020 consumer foodservice forecast guidance
What do operators need to survive?
How will COVID-19 change the industry?

Economic Outlook

Global GDP is likely to contract in 2020 under the baseline scenario
The COVID-19 pandemic impacts both supply and demand
In our baseline view, the pandemic peaks in June 2020
Three scenarios examine the impact of a more severe outbreak
Our view in short
Forecasts for Real GDP growth in 2020 under different scenarios
Financial markets on risk-off mode as COVID-19 entered Italy
China: An early glimpse into the economic cost of the virus
COVID-19 highlights need for supply chain diversification
Fiscal stimulus a challenge with restrictions on expenditure
What could alleviate the economic effects of the pandemic?
What could exacerbate the economic impact of the pandemic?

Industry Impact

COVID-19 impact at a glance
Routes to disruption
The five-step consumer progression of COVID-19
Unprecedented shock to the global consumer foodservice industry
A crisis far bigger than any one industry
Early indications from key markets signal what is to come
China sounds an early warning
Timeline of Chinese outbreak sets base timeline for outbreak
Greece suggests ominous long-term trajectory
All categories impacted but limited service is better equipped
Eat-in traffic still crucial to global consumer foodservice demand
Eat-in traffic now increasingly banned across the globe
Cafés/bars and full-service restaurants to be hit hard by mandated closures
Monthly breakdown gives sense of potential contraction
US forecasts reveal significant room for variation
Factors which can impact our forecasts
Gauging impact of national policies by positive/negative impact

Corporate Response

Main challenges for consumer foodservice players
A highly challenging period for delivery aggregators despite shifts
China exposure and to-go formats could offer advantage to chains
China exposure short-term drag, but likely mid-term boon for YUM!
McDonald’s has large drive-through advantage in North America

Conclusion

How will COVID-19 change the industry?
Contactless innovation and smartphone ordering to surge
Retail/foodservice blurring to accelerate
Crisis could drive new direct-to-consumer focus for product brands
Daily need for meals to drive new relationship with cooking
Multiple revenue streams and formats a must for all

About Our Analytic Capabilities

About Euromonitor International’s Macro Model

Consumer Foodservice

Consumer foodservice is composed of cafés/bars, full-service restaurants, limited-service restaurants, self-service cafeterias and street stalls/kiosks.

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