New forecast: Foodservice sales could fall by as much as 48% in 2020

Published May 14, 2020

COVID-19 has had a devastating impact on Canada’s restaurants. While jurisdictions across the country are moving forward with reopening and recovery plans, an incredible amount of uncertainty still lies ahead for the foodservice sector.

Canada’s economy is now in a deep recession. At this point on the road to recovery, it’s still too early to predict the impact that evolving government restrictions and stimulus measures will have, and how quickly consumers and businesses will be able to adapt.

Three potential paths for foodservice sales in 2020

With so much uncertainty, Restaurants Canada has forecast three possible scenarios to help foodservice businesses plan ahead for the remainder of 2020. Regardless of scenario, commercial foodservice sales will not return back to their pre-COVID-19 levels in 2020.

Scenario 1 – In this scenario, pent-up consumer demand will lift foodservice sales in May and June relative to April. This forecast is heavily contingent on how quickly governments ease containment measures and how swiftly consumers and businesses adapt. The combination of strained household finances and few international tourists will keep foodservice sales below 2019 levels over the remainder of the year and into 2021. As a result, annual foodservice sales in this scenario are expected to decline by 24.4% in 2020 compared to 2019. This would represent a loss of $21.2 billion in commercial foodservice sales.

Scenario 2 – This is the most likely scenario, in which consumers are more cautious about returning to restaurants and drinking places once containment measures are lifted. A high unemployment rate, staggering household debt, and weak consumer confidence will restrain overall consumer spending for the remainder of the year. As a result, annual foodservice sales in this scenario are expected to decline by 37.2% in 2020 compared to 2019. This would represent a loss of $30.7 billion in commercial foodservice sales.

Scenario 3 – In this scenario, containment measures are removed more slowly compared to the previous two scenarios. Once lifted, consumers are reluctant to dine out at foodservice establishments at first. And when consumers finally return to restaurants, they will eat out with much less regularity. As a result, annual foodservice sales in this scenario are expected to decline by 48.4% in 2020 compared to 2019. This would represent a loss of $39 billion in commercial foodservice sales.

Depending on how events unfold, the next quarterly report will provide a more detailed sales forecast by segment through to 2021.

Click here for the full Quarterly Forecast

Restaurants Canada Digital

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