Foodservice suffers dramatic slump in spend

Foodservice spend crashed by 80% in April as lockdown forced pubs and restaurants to close their doors and shift to takeaway or delivery models.

Weekly spend in the British out-of-home sector in April 2020 was just over £200m, compared with April 2019’s weekly spend level of around £1 billion, according to data from The NPD Group.

The decline in foodservice visits in April was almost three times as severe as the collapse seen during the financial crisis of 2008-2010.

Over the whole of Q1 2020, there was a 10% year-on-year decline in out of home visits, a figure that rose dramatically to 54% for the two-month period covering March and April.

Many of those who continued to use foodservice outlets were driven by value for money with a record 28% of visits in April influenced by whether an outlet could offer a good price. Visits made using a meal deal were also the highest ever seen for any April, at 32%.

Personal or online recommendations became increasingly important in April 2020, accounting for nearly 8% of visits in comparison to the 4% to 5% level seen in the past five years.

The importance of quality offered by a foodservice outlet rose by one third year-on-year, with customers most likely associating quality with hygiene, according to The NPD Group.

“The scale of the crash in out-of-home foodservice visits is unprecedented and the 80% fall in spend underlines the severity of the collapse. As we start to come out of lockdown, consumers are likely to be sensitive to prices and value for money,” said Dominic Allport, insights director (foodservice) at The NPD Group.

“While reopening and initial recovery is imminent, and the relaxation of social distancing is welcome, the eating-out industry has a huge task ahead if it is to return to anything like normal trading,” Allport added.

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