Coined the ‘new normal’ there are numerous predictions about how our ‘adjusted normality’ will pan out. Of course, nobody knows for sure how this unprecedented pandemic will affect UK consumers and the eating out scene in the months ahead, but here are some of the top predictions across both…
According to the GCA Business Confidence Survey May 2020 less than 25% of people are comfortable eating/drinking out as soon as restrictions are lifted (22% to be precise). Conversely, 31% would be comfortable resuming normal visits to pubs, bars and restaurants, but would be cautious, whilst 21% would also resume visits, as long as there were added precautions in place.14% of people said they wouldn’t feel comfortable resuming visits to pubs, restaurants and bars and 13% said they didn’t know yet.
With regards Covid adaptations when eating out, 64% said they would feel more comfortable if tables & seats were moved apart, 60% if free hand sanitiser was available, 56% if there were enhanced cleaning protocols (theatre of cleanliness) and 55% if there were social distancing measures, whilst 30% said they would feel more comfortable if staff wore protective equipment.
Whilst when it comes to general post-Covid consumer trends there are various factors at play including:
A strong focus on value for money associated with low consumer confidence and reduced disposable income that will accompany the inevitable post-Covid recession. Heightened concerns over hygiene with pre-packaged options preferred in food to go and a move towards contactless ordering. An increase in at home entertaining and scratch cooking. Heightened awareness of mental & physical wellbeing, driving healthier and responsible choices. An increase in delivery and take away in foodservice as consumers choose the safety of their own home. A possible surge in socially distanced going out post lock-down (larger events likely to be 2021). A rise in staycations in the UK as air travel is avoided. Flexible working and working from home may impact B&I catering and food to go. The ‘Lipstick effect’ may kick-in, which is the theory that when facing an economic crisis, consumers will be more willing to buy smaller treats to give themselves a boost. There may also be an increase in environmental awareness and rise in organic and plant-based diets, as consumers look to find food they can trust. There is also likely to be a greater reliance on technology for ordering, payment and service e.g. click & collect, OrderPay app and contactless with a focus on speed of service.
Foodservice & Hospitality Operators
When asked about long-terms changes in consumer behaviour post-lockdown, of the 120 operators surveyed 80% expected increased hygiene demands, 71% a decreased frequency of eating and drinking out, 67% a reluctance to visit city and town centres, 52% an increased desire to support local, 43% an increased frequency of delivery and 34% an increased desire for premium experiences.
Looking at the market as a whole, as far as operators’ margins, there will be a need for net profits >10% to recoup lost revenue during lockdown as well as to counteract the negative effects of social distancing, with lower capacity levels and third party delivery charges in some cases. We will undoubtedly see operator Darwinism with closures and downsizing of estates to run only strong sites and, sadly, related job losses in the sector. There will be a drive to cut costs and reduce waste with pre-prepared, lower cost dishes & central production kitchens, which will need to be balanced with the need to deliver quality & value for money to differentiate brands. This may result in a polarisation of the market with lower cost, transactional foodservice brands at one end and high cost premium experience-led foodservice brands at the other, which will be more expensive due to limited customer numbers/cost of set-up.
Operational challenges to implement social distancing both front of house and back of house, along with ‘theatre of cleanliness’ measures to give customers reassurance, will all add to overheads. We are likely to see a heavier reliance on technology both front of house with contactless, vending, click & collect, delivery etc. and back of house with automation to reduce labour costs. Whilst al fresco dining may provide a social distancing solution for those operators with outdoor space and a way to drive another line of revenue.
On a practical note, some kitchens may move to shifts to minimise the number of staff in the kitchen (splitting prep and finishing). Menu development is likely to focus around dishes that are stable for delivery and take away and we may see a rise of dark kitchens & delivery only brands, as well as drive-thru and kerb side collect. Meal kits initiated by some brands under lockdown could also provide an additional revenue stream with consumer sized formats required. Conversely, we may see a rationalisation of ingredients, as chefs look to cut costs, which will drive the demand for versatile ingredients. As far as the visitor profile there is likely to be a dramatic drop in international tourism but an associated rise in staycations, which is likely to benefit more rural locations, whilst city centre hoteliers struggle to drive up occupancy rates without foreign visitors.
Of course, this won’t be forever! It is generally agreed that a safe and effective vaccine which can be widely distributed will enable us to return to a ‘normal normal’ rather than the ‘new normal’ of Covid. Things may change as this crisis continues and in time passes, but at the time of publishing in early May 2020 this blog has been informed by a wide range of sources including:
Stay safe, well and alert!