UBS expects restaurant sales to plummet 40% as a result of the coronavirus pandemic, undoing 20 years of growth for the industry as grocery stores dominate
While UBS estimates a 40% loss of revenue for food services, grocery stores could recoup 10% of those losses.The restaurant industry is expected to lose 20 years of revenue gains as a result of the coronavirus pandemic, according to a new UBS report
Focusing early on e-commerce, alternative revenue streams, and differentiated offerings will allow grocers to preserve or even expand their market share over the long run.The restaurant industry has slowly been making headway over the grocery sector for the last 20 years. There are two likely factors for a structural shift away from foodservice consumption. The first is that consumers are expected to be more price-sensitive as the likelihood of a recession continues to weigh on purchasing decisions. Personal savings rates spiked during previous economic crises, showing that consumers often choose to save their money during periods of economic uncertainty.
"We believe that food and beverages at home could recoup around 10% of that reduced spend," the report reads. However, grocery stores must take action to snap up that 10% gain.
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