Industry is expected to lose $183 billion in 2020, according to Technomic,
CHICAGO — The U.S. foodservice industry will face significantly more losses in 2020 than initially predicted because of the coronavirus pandemic.
As of March 23, the expected year-over-year nominal decline for U.S. foodservice in 2020 was between 11% and 27%, according to CSP’s sister research firm, Technomic. Although the worst-case scenario remains the same as of late May, the best-case scenario has now jumped to 18%.
On a nominal or current dollar basis, U.S. foodservice is expected to lose $183 billion in 2020, putting the industry at the same relative size it was in 2012, said Technomic. But when observing 2019 constant dollars, this decline puts the industry at a revenue level not seen since 1996.
U.S. foodservice will likely rebound in 2021, but it will not reach the revenue level seen in 2019, Technomic said.
“The degree of decline will be dependent upon the timing of lifting restaurant closure restrictions, the status of school and college openings in the fall, the degree of travel return and a possible second COVID-19 wave in the fall,” it said.
Convenience stores, healthcare and supermarkets are expected to perform the strongest by the end of the year since these industries remain open, Technomic said. These sectors are followed by limited-service restaurants, which are strongly positioned for off-premise business, while travel and leisure and fine dining will take the hardest hits.
“As shelter-in-place mandates are in force, causing travel to be considerably down, lodging, recreation and transportation are experiencing significant declines,” said Technomic. “Fine dining is impacted by its on-premise orientation and its strong reliance on business travel.”
Technomic is releasing weekly updates from original research as the COVID-19 situation continues to unfold.
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