COVID-19 uptick shouldn’t slow foodservice recovery

A recent surge in COVID-19 cases in the U.S. has not affected consumer spending or foodservice sales numbers, says a new report from Rabobank.

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eric1513 | Bigstock.com
eric1513 | Bigstock.com

A recent surge in COVID-19 cases in the U.S. has not affected consumer spending or foodservice sales numbers, says a new report from Rabobank.

While the expansion of dine-in restrictions “may weigh on consumer behavior for a short period, we expect U.S. foodservice recovery to continue, as initial hotspots (e.g. New York) show no resurgence, and more importantly, the consumer spending trajectory is largely unchanged in new hotspots (e.g. Florida, Texas, California),” Amit Sharma, Senior Analyst – Consumer Foods, Rabobank, wrote in the report.

Another shutdown unlikely

By the end of June, most U.S. states had at least partially reopened non-essential businesses. But in the last few weeks, some local and state governments have tightened restrictions or rolled back reopening plans in response to emerging COVID-19 hotspots. However, another widespread shutdown is unlikely, the report noted.

“Specifically, over the last two weeks, ten states have slowed down their planned reopening, including: bar closures and reduced dine-in capacity in Florida, Texas, and California; bar closures and public gatherings limited to 50 people in Arizona; bars closures in Colorado, Delaware, and Michigan; and indefinite postponement of dine-in services in New York City,” Sharma wrote.

In addition, KFC announced they were temporarily closing the dining rooms at all 40 company-owned locations in Florida. McDonald’s also put a pause on reopening plans for 21 days.

“Consumer anxiety is high, given the lack of a cohesive action plan on reopening, and it could be worsened by mainstream media reporting of an upcoming second wave,” Sharma said.

Could slow, but won’t stop, foodservice recovery

A rise in COVID-19 cases has paused, but not reversed, consumer spending – especially when it comes to foodservice.

“Foodservice has held on to most of its recovery, even as daily COVID-19 cases more than doubled, likely signaling that the delayed spike in new hotspots has given both consumers and operators sufficient time to prepare for the ‘new’ normal,” Sharma wrote.

“The stickiness of foodservice recovery is also evidenced by the absence of a consumer shift to at-home food during the recent spike, unlike the massive shift to food retail during the initial surge in March and April.”

View our continuing coverage of the coronavirus/COVID-19 pandemic.

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