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Foodservice industry shows early signs of recovery

Spend for week ending Sunday July 12th recovered to 50% of the levels seen before the COVID-19 lockdown, suggesting a slow but encouraging recovery in the British out-of-home (OOH) foodservice market, says The NPD Group.

Dinner shows the strongest recovery with weekly spend now at almost two-thirds (64%) of pre-lockdown levels. This improved performance for dinner is supported by the continued strength of delivery, which grew during lockdown and is now still 60% higher in spend terms than it was before the lockdown.

Activity is on the increase at weekends as people grasp the opportunity to socialise. In the three weeks since the end of June, weekend spend has doubled from 29% of pre-lockdown to 57%. Recovery is more evident among younger consumers.

Spend motivated by the desire for a ‘treat’ has increased sharply and at the beginning of July had recovered to 70% of pre-lockdown levels.

Meanwhile, dining in is still more popular than dining out - spend for eating out as of Sunday July 12th was 77% below levels seen before lockdown - indicating reluctance among some consumers to eat or drink inside foodservice establishments.

Dominic Allport, insights director (Foodservice), The NPD Group, said: “While this data on spending shows evidence of some recovery in British foodservice, it is not clear if this reflects the start of a sustainable improvement or the short-term satisfaction of pent-up demand following relaxation measures. Perspex screens, hand sanitizers, masks, gloves, social distancing messaging and other initiatives underline that the British foodservice experience has changed. But it also shows this industry is working hard to recover. These tentative signs of improvement are welcome and foodservice operators will want to build on this.”

He adds: “Treating could be an indication that consumers have grown impatient with lockdown and the restrictions associated with it. Operators can tap into this desire for a personal or family treat by offering choice or value to encourage repeat visits. The prevalence of eating prepared food at home is further evidence that some consumers simply aren’t ready to eat out. That’s not surprising given the impact of the lockdown on people’s psyche, especially older people or those who have underlying health conditions.”

Looking ahead, the NPD Group says staycations will be positive for the industry but with regards to the new ‘Eat Out to Help Out’ scheme, it believes while it might boost visits, its short-term validity won’t allow it to have a big impact.

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