Britain's foodservice spend plunges by 80% YoY in April
March and April out-of-home visits also fell by more than half.
Weekly spend in British foodservice in April 2020 was just over £200 million, 80% less compared to April 2019’s weekly spend level of around £1 billion.
This is according to The NPD Group, which also revealed that the decline in British out-of-home (OOH) foodservice visits in April was almost thrice as severe as the collapse seen during the 2008 financial crisis.
By the end of Q1 2020, there was already a 10% year-on-year (YoY) decline on OOH visits, attributed to customers already avoiding eating out prior to the official start of the lockdown.
This decline is said to have accelerated dramatically in April, with the two-month period of March and April 2020 recording a 54% fall.
NPD adds that price and deal-related visits reached record levels in April, with more than 28% of visits being influenced by whether an outlet could offer a good price.
This was the highest percentage ever seen by the group in the month of April, including during the financial crisis. Visits made using a meal deal were also the highest ever seen for any April, at 32%, whilst the average bill on deal was 5% higher than average.
Personal or online recommendations also became increasingly important in April, accounting for nearly 8% of visits compared to 4% to 5% levels seen in the past five years. During dinner, personal or online recommendations accounted for almost 10% of all visits, compared to the usual 4% figure. The importance of ‘quality’ offered by a foodservice outlet rose by one third YoY, with consumers likely associating quality with hygiene.
“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. Value-related visits should increase rapidly in the same way as the 2008-2010 financial crisis when price-driven or voucher-driven visits rose sharply,” The NPD Group’s insights director for foodservice Dominic Allport said.
NPD also expects deal-based visits to increase as they did in the financial crisis, having grown by over a quarter despite the overall market registering a 2% visit decline.
“The importance of meal deals is likely to grow as operators fight for market share. Operators are now more savvy about these deals, and they know that consumers that buy on ‘value’ can often spend more if the product range and offering is right. However, it’s important to sound a note of caution. 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. The good news is this is an extremely innovative and creative sector, and we know it will adapt fast to create the ‘new normal’,” he concluded.
