Decline in restaurant spend three times greater than the last financial crisis

Spending in restaurants and cafes plummeted by 80 per cent in April - three times as severe a drop as seen during the financial crisis of 2008, new figures have revealed.

Weekly spend in UK food service in April 2020 was just over £200 million, compared to April 2019’s weekly spend level of around £1 billion.

The report from NPD Group found that although lockdown officially started on 23 March, many people were already avoiding eating out, meaning that by the end of the first quarter of 2020, which runs to the end of March, there was already a 10 per cent year-onyear deterioration in “out of home” eating. This decline accelerated dramatically in April and for the two-month period of March and April, the fall was 54 per cent.

While restaurants were forced to close their doors to diners as the Coronavirus crisis took hold, many launched takeaway services to compensate for lost earnings.

Dominic Allport, insights director of food service at the The NPD Group, said: “The scale of the crash in outof-home foodservice visits is unprecedented and the 80 per cent fall in spend underlines the severity of the collapse. As we start to come out of lockdown, consumers are likely to be sensitive to prices and value for money.

“Value-related visits should increase rapidly in the same way as the 2008-2010 financial crisis when price-driven or voucher-driven visits rose sharply. We also expect dealbased visits to increase as they did in the financial crisis: they grew by over a quarter even though the overall market registered a 2 per cent visit decline.”

The study found that like during the last financial crisis, when restaurants and cafes were forced to innovate to bring back customers, dealbased offer such as vouchers enjoyed a resurgence.