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Food Service Industry Updates

Want to Bring Back Customers? Two Words — Safety and Sanitation


After several years of growth, market researcher Mintel said it expects the foodservice industry to decline in sales by up to 30% from 2019 to 2020 because of … you know what.

The coronavirus and the restaurant restrictions and closures it has caused is to blame, of course.

But looking ahead Mintel predicts total market sales to rebound to pre-pandemic levels by 2023, with limited-service restaurants (LSRs) including fast-food and fast-casual restaurants bouncing back more quickly and representing a notably larger share of the market.

While sales declines will be felt across both LSRs and full-service restaurants (FSRs), the majority of these declines will be driven by the FSR segment, which has been hit the hardest by pandemic-related closures and restrictions, according to Mintel, which has U.S. offices in Chicago and New York. During 2020, FSRs are predicted to see a 39-42% decline, while LSRs are expected to decline 13-18%.

“Pre-COVID-19, restaurant industry sales were set to outpace at-home food spending, new restaurants were opening at a rapid pace and operators were challenged by a labor shortage to find and retain workers,” said Amanda Topper, Mintel’s associate director of foodservice. “In a few short weeks, the global pandemic turned the industry on its head, forcing a complete reset.

Topper added that LSRs are offsetting steeper declines with a focus on value. “They were innately better prepared operationally because of established drive-thrus, delivery options and lower price points,” she noted. “Pre-pandemic investments in off-premise technology, including mobile ordering, also set up LSR operators to weather the storm better.”

Dine-in restrictions will continue to shift the focus to off-premise options in the short- and medium-term or through the end of 2020), Topper said.

“During the short term, drive-thru, takeout and delivery options will help mitigate sales declines. In the long term [one to two years from now], continued investments in off-premise dining will help operators recoup sales, but foodservice will continue to be challenged in a recession as consumers cut back on discretionary purchases,” she stated.

According to Mintel, two in five consumers (40%) are looking forward to going to a restaurant once social distancing measures are relaxed, but there is still concern about doing so. Consumers will demand operators continue to take safety and sanitation seriously, as 42% of diners want to hear about food safety and sanitation from restaurants. Meanwhile, value will be top of mind for thrifty diners as 68% of U.S. diners say that they are constantly searching for good restaurant deals.

“Even as dining rooms reopen on a state-by-state basis, consumers are likely to have concerns about dining out and limited budgets to do so,” Topper said. “Heightened safety and sanitation practices and value-based promotions will be vital to gain consumer trust and woo back diners.”

While food safety and sanitation were important areas of focus before COVID-19, the outbreak has brought these practices front and center, and ways to continually improve them will be critical moving forward, Topper stressed.

“Even more so, transparency about those measures will help operators welcome diners back, whether on-premise or off. Visual cues demonstrating detailed sanitation programs will be imperative,” she added.


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