Shut Up Shop or Adapt: How Foodservice Brands Are Responding to the Coronavirus Outbreak

It has been 17 days since we were politely asked to work from home if we could; and five days since we were told to! Doesn’t it feel much longer as we all adapt to new routines?

For the foodservice sector, the damning news that pubs and restaurants must shut came on Saturday, with the exception that they could offer a takeaway/delivery service to ensure that communities have access to food. So how have they responded?

The MCA Operator Data Index (ODI) tracks the outlets and turnover of over 390 brands, across several channels including bakeries, restaurants and pubs.  Curious to see what different operators have decided to do, we have analysed the brands we cover in ODI to determine whether they have closed completely or are continuing to operate alternative services including takeaway and delivery.  Data was collected 24-25 March 2020.

Over half (55%) of all brands captured in MCA’s Operator Data Index have closed, with this proportion soaring to 70% of branded restaurants and 77% of pub restaurants.  At a total level, this equates to 17,939 sites which have closed; of which, 3,295 branded restaurant sites and 2,730 pub restaurant sites have shut their doors.  Closing completely, operators will take no revenue for anywhere from three weeks to three months in a worst-case scenario.

With staff, rent and other costs to keep in mind, it is a huge call for operators to close completely, but one that has become reality for most of the branded foodservice market, including large players such as Greggs, Costa Coffee and McDonald’s.  The government has announced several measures to help businesses at this difficult time, not least the abolishment of business rates for small businesses and the new furloughed worker package, in which the government bid to pay staff kept on by employers 80% of their monthly wage up to a limit of £2,500.  

Despite the confirmation that takeaway and delivery services are allowed, just 19% of operators are attempting to offer a delivery and/or takeaway service.  16% of branded restaurants and 10% of pub restaurants have opted to offer this.  Delivery logistics giant, Deliveroo, has launched a new rapid payment system so that restaurants can access cash made from deliveries within 24 hours. The new service is completely free of charge to operators, with Deliveroo covering any increased banking charges.  This will be on offer for at least the next three months and is aimed at reducing cashflow challenges faced by small businesses.

Some operators are offering a delivery service for the first time, including tapas restaurant, Ibercia.  Meanwhile, contemporary fast food operator Leon has adjusted its sites to operate as ‘mini supermarkets’, offering meals and groceries, as well as other essential supplies to consumers. 

For brands in the Operator Data Index, especially those in the public eye, there will be pressure to close for the health and safety of all staff.  The wider market of independent restaurants will be under extreme financial pressure, with the risk to staff on a smaller scale than larger groups.  It is expected that a greater number of independent restaurants will continue to offer takeaway and delivery services, albeit operating reduced hours. 

At this extremely challenging time, MCA Insight and HIM would like to show our support to everyone working in the Foodservice industry and recognise the tough decisions that are having to be made on a daily basis.



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