UK foodservice operators will lose more than half of their expected revenues during the Covid-19 lockdown, with other European countries even worse affected, according to a report from banking and financial services company Rabobank.
The Coronavirus in Europe report looks at impacts across all food and agribusiness sectors but names foodservice as one of the ‘worst-hit’ industries.
With most European governments having banned eating out as of mid-March, the report quantifies the predicted impact of the shutdown on foodservice operators. As long as current circumstances continue, it forecasts losses of between 51% and 77% of expected revenue, measured in national terms, with Spain and Italy the worst affected countries.
Even if delivery and takeaways continue to function, the UK is forecast to lose 52% of its expected revenues during the lockdown, amounting to nearly £2.5 billion in sales per month excluding VAT.
In Italy and Spain, where takeaways are not operating, lost foodservice revenues will amount to around €4.5 billion per month, according to Rabobank’s analysis.
The report also highlights the knock-on effect to suppliers, who could lose sales to foodservice of €400 million to €900 million per month, varying by country, in the event that consumers shifted all of their demand to food retail.
The effect on individual suppliers will vary depending on their ability to offset losses by switching products to retail, which in turn depends on factors such as the suitability of their product offering for at-home consumption.
Maria Castroviejo, senior analyst at Rabobank, said: “Foodservice outlets across the whole of Europe will take a massive hit as people are confined to their homes.
“Many are understandably chasing revenues by adapting their business models and offering new services, but this doesn’t fill the enormous void left by restaurants full of empty tables.
“It’s also having a knock-on effect to suppliers that will force them to adapt. People are unlikely to cook meals using exotic ingredients such as oysters and octopus at home or bulk buy industrial-sized quantities of products, which will hit profits hard.”
In the UK, several schemes designed to support suppliers have been launched in recent weeks, including an initiative to support food producers to launch delivery services and a wholesale support platform, aimed at averting large-scale food waste.
© FoodBev Media Ltd 2019