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Business is up but restaurants still need to adapt


Jochen Pinsker: “It’s about being entertained”


“IT’S BEEN a rollercoaster ride for the big-six European markets,” Jochen Pinsker, senior vice-president Foodservice Europe at the NPD Group, reminded delegates at the Happetite session, Reboot the Restaurant Industry: Key Figures and Trends.
NPD’s research shows foodservice turnover plummeted 80% in April 2020 but by October 2021 the deficit had narrowed to just 10%. “Lockdowns have eased and restaurants have learned how to deal with COVID,” Pinsker said. “Consumers are once again ready to use restaurants in all their different facets.”
But some sectors of the industry have performed better than others. “If you’re in quick service you’re much better off because takeaways are in your DNA. But full service and the leisure sector have been punished,” he said.
Understanding ‘visit situations’ is key to understanding these changes: pre-COVID work-related visits made up 36% of total business and they’ve been hardest hit with turnover still down by 30%-40%. Conversely during the pandemic the only growth sector was home meals, which have seen their market share almost double from 11% to 21%.
Looking forward Pinsker identified four factors that were going to influence the industry. First is the overall economic situation, where Pinsker is relatively sanguine, pointing out that GDPs have largely recovered to pre-pandemic levels.
Second is changes in restaurant capacity, with a large slice of the sector having gone out of business and sites that have survived often restricted on how many people they can serve.
Third is consumer sentiment towards restaurants, which Pinsker believes has recovered. “People are smart enough to know restaurants aren’t risky places,” he said.
And the fourth and potentially most worrying factor is the changing world of work. Pinsker cited research by McKinsey predicting that on any given day 25% of office workers would be at home. And he believes that business travel will not rebound to pre-pandemic levels. “When people are at home your biggest competition isn’t another restaurant, it’s the fridge or the coffee machine,” he said. And he predicted breakfast trade, which was largely a work-related occasion, would not recover.
With this in mind Pinsker predicted delivery and click-and-collect would be key. “Also what’s going to change is location, with more demand for foodservice in residential and suburban locations,” he said. “Pret in the UK had been quick to change its location strategy to reflect these trends.”
But at the same time people who spend more time working alone at home will be missing social contact, so Pinsker predicted a growth in mid-afternoon snacking as people get together with friends and neighbours over a coffee. And people will be looking to socialise more in restaurants. “When we go out, experience is going to be key,” he said. “It’s not about getting your stomach filled, it’s about being entertained.”

 
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