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Providing the most comprehensive and up-to-date information and analysis of the The Impact of COVID-19 on Foodservice – US market, and the behaviours, statistics, preferences and habits of the consumer.

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What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

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At the height of the COVID-19 pandemic, dine-in bans preventing bars and restaurants from on-premise operations went into effect across the country, with most states also enacting shelter-in-place orders limiting nonessential business and travel to limit the spread of COVID-19. These restrictions severely impacted foodservice industry sales. The National Restaurant Association estimated the foodservice industry would lose $240 billion in revenue and more than 8 million employees through the end of 2020. According to its March 2020 survey of 4,000 restaurant owners and operators, 11% anticipate they will permanently close within the next 30 days, while 3% had already permanently closed.

Expert analysis from a specialist in the field

Written by Amanda Topper, a leading analyst in the Foodservice sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Restaurants are in the business of bringing people together, making it even more difficult for operators to weather this storm. 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. In a few short weeks, the global pandemic turned the industry on its head, forcing a complete reset Amanda Topper
Associate Director – Foodservice

Table of Contents

  1. Overview

    • Scope
      • Definition
        • Economic assumptions
          • COVID-19: US context
          • Executive Summary

            • Analyst perspective: flexibility during the pandemic will help operators survive during COVID-19 and beyond
              • Overview
                • Key takeaways
                  • Short-, medium- and longer-term impacts
                    • Figure 1: Impact of COVID-19 on the foodservice industry, June 2020
                  • Market performance and sales forecast
                    • Figure 2: Total US revenues and forecast sales ranges of restaurants and eating places*, at current prices, 2014-24
                  • Foodservice performance
                  • Impact of COVID-19 on Consumers

                    • The priority has shifted to at-home food
                        • Figure 3: COVID-19 spending priorities, April-June 2020
                      • The return to normalcy is a patchwork quilt
                          • Figure 4: Future activities, going to a restaurant, by age, May 28-June 4, 2020
                        • Mintel Trend Drivers
                          • Figure 5: Mintel Trends Drivers
                        • Identity: restaurants are woven into the fabric of communities
                          • Surroundings: independents and chains can emphasize their local impact
                            • Experiences: memorable meals make repeat customers
                              • Rights: diners expect restaurants to keep them safe
                                • Technology: online ordering connects diners and restaurants, on-premise and off
                                  • Value: barbell menus offer something for every budget
                                    • Wellbeing: consumers are creatures of comfort but can be nudged toward healthier habits
                                    • How a COVID-19 Recession Will Impact Foodservice

                                      • Unprecedented sales losses expected
                                        • Figure 6: Total US revenues and forecast sales ranges of restaurants and eating places*, at current prices, 2014-24
                                        • Figure 7: Total US revenues and forecast sales ranges of restaurants and eating places*, by segment, at current prices, 2014-24
                                      • US unemployment reaches levels not seen since Great Depression
                                        • Figure 8: Unemployment and underemployment, January 2007-May 2020
                                      • Dining out is among the first nonessentials to go
                                        • Figure 9: Spending cuts after job loss – NET any rank, November 2019
                                        • Figure 10: Consumer spending on food away from home, monthly, 2006-10
                                        • Figure 11: Consumer spending on food away from home, annual, 2000-19 and Q1 2020
                                    • State of the Foodservice Category Before COVID-19

                                      • Shifts to off-premise were already in play
                                        • Figure 12: Restaurant delivery and pickup in the past three months, June 2016, September 2018 and September 2019
                                      • Consumers were visiting fine dining restaurants more often year over year
                                        • Figure 13: Year over year change in restaurant visitation, November 2019
                                      • Family midscales viewed as old-fashioned and generic
                                        • Casual dining struggles with value perceptions
                                          • Figure 14: Reasons for dining at casual dining restaurants less often, November 2019
                                        • Tech innovations were a well-timed enhancement for LSRs
                                          • Figure 15: Fast food dining behaviors year over year – More often, by generation, February 2020
                                        • Blurring and stolen share among LSRs
                                          • Figure 16: Percentage share of Top 200 limited service restaurant sales, by segment, 2017-18*
                                      • Short-term changes in the foodservice industry

                                          • Figure 17: Impact of COVID-19 on foodservice, June 2020
                                        • Creativity helps delivery/takeout ramp up quickly
                                          • Figure 18: Change in takeout and delivery frequency, March & April 2020
                                          • Figure 19: Little Caesars TV campaign, March 2020
                                        • Brands pivot to provide consumers value and new experiences at home
                                          • Kids meals and family promos head home
                                            • Figure 20: Family dining email promotions, March & April 2020
                                          • Menus scale down while comfort food trends up
                                          • Medium-term changes in the foodservice industry

                                              • Figure 21: Impact of COVID-19 on foodservice, June 2020
                                            • Food safety and sanitation measures will help diners’ comfort level
                                              • It’s all about value
                                                • Independents feel the love
                                                  • Figure 22: Restaurant attitudes – NET agree, by generation, April 2020
                                              • Longer-term changes in the foodservice industry

                                                  • Figure 23: Impact of COVID-19 on foodservice, June 2020
                                                • The US restaurant industry will be much smaller
                                                  • Employee and community initiatives stay front and center
                                                    • Figure 24: Restaurant attitudes – NET agree, by generation, April 2020
                                                    • Figure 25: Popeyes TV campaign, April 2020
                                                  • Off-premise dining will be even more mainstream
                                                    • Greater competition and restrictions for third-party delivery companies
                                                    • Appendix – Data Sources and Abbreviations

                                                      • Data sources
                                                        • Sales data
                                                          • Consumer survey data
                                                            • Consumer qualitative research
                                                              • Direct marketing creative
                                                                • Abbreviations
                                                                • Appendix – Market Data

                                                                    • Figure 26: Total US revenues and forecast sales ranges of restaurants and eating places*, by segment, at inflation-adjusted prices, 2014-24
                                                                • Appendix – Consumer Data

                                                                    • Figure 27: Change in fast casual visitation, February 2020
                                                                    • Figure 28: Fast casual visitation drivers, February 2020
                                                                    • Figure 29: Fast casual visitation barriers, February 2020

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