Restaurants Canada’s latest Quarterly Forecast is projecting that total commercial foodservice sales could decline by a staggering 30.8% in 2020 compared to 2019. In dollar terms, commercial foodservice sales are forecast to fall to $51.5 billion in 2020 compared to $74.4 billion in 2019. This would represent the lowest annual foodservice sales since 2011.
The new forecast for foodservice sales lands roughly midway between Scenarios 1 and 2 as outlined in our previous Quarterly Forecast released in mid-May.
Following a 10.4% decline in the first quarter, commercial foodservice sales in Canada plummeted by a devastating and record-breaking 49.5% in the second quarter of 2020. This represents the lowest quarterly sales since 2001. Foodservice sales are forecast to decline by 29.6% in the third quarter and by 31.1% in the fourth quarter.
Cautious consumer spending, lower international travel and weak business spending will restrain foodservice sales growth over the next two years. In 2021, commercial foodservice sales are forecast to remain 8.9% below 2019 levels, while sales in 2022 are projected to be just 0.9% above 2019 levels.
These forecasts depend on several critical assumptions. Most importantly, that coronavirus vaccinations will begin in early 2021. Once an effective vaccine is found, pent-up demand will boost domestic spending and international travel. Office workers and businesses in the downtown core will return to some form of “new normal”.
However, a delay in finding an effective vaccine would significantly lengthen the recovery time for the foodservice industry. In addition, this forecast also assumes there will be no further national lockdown like the one in April 2020. Another major lockdown would have a devastating impact on foodservice sales. Many operators are not likely to survive.
The latest Quarterly Forecast will be sent out to all members soon, and available HERE. The report will contain the latest foodservice forecasts for full-service restaurants, quick-service restaurants, caterers and drinking places for the remainder of 2020 to 2022.