Globally, restaurant businesses will lose nearly USD 600 billion (EUR 537 billion) in consumer spending in 2020 due to the COVID-19 pandemic, according to a recently released report from industy research firm Technomic.
The losses represent a drop of 25 to 30 percent of total restaurant sales compared to 2019, according to Technomic. The firm also said that economic growth is forecasted to return in 2021, but likely not until the second quarter or later.
“The restaurant industry has taken a huge hit on a global scale, causing operators to get creative on promotions and innovate their menus to stay afloat,” Technomic Senior Principal David Henkes said in a press release.
Separately, in the United Kingdom, numerous insolvencies are expected as a result of COVID-19. Losses at the top 100 restaurant groups increased by 94 percent to GBP 151 million (USD 189 million, EUR 170 million) in 2019, according to accountancy group UHY Hacker Young.
“The restaurant sector has been put under huge pressure by this crisis and the lockdown. It really needs the government to formulate proposals that will help the sector bounce back as quickly as possible,” UHY Hacker Young analyst Peter Kubik told Independent.
As restaurants re-open, “flexibility on social distancing rules will therefore be key in both ensuring customers enjoy their experience and restaurants remain profitable,” Kubick added.
Technomic found that Asian economies addressed the pandemic earlier in 2020 and took hits in the first and second quarters of this year. However, “restaurants are currently faring better there than other parts of the world,” Technomic said.
The U.S. had more success relying on drive-through and off-premise sales than Europe, where many countries had a complete shutdown of restaurant activity.
“Europe is expected to face further challenges as tourism will be down in the summer and fall of 2020,” Technomic said.
Full-service restaurants are expected to see a much larger impact than limited service, Technomic reported.
“Major global chains may continue to take share from smaller, more local players and accelerate the ‘globalization’ of the industry, particularly in the limited-service space,” Technomic said.
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