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The hospitality industry saves the first 'match ball' of the crisis thanks to home delivery

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Home delivery is becoming one of the fundamental pillars of the hospitality sector in the face of the pandemic. 2019 was the second consecutive year in which the consumption of OOH (Out-Of-Home or Out of Home) food increased, accounting for 44% of the total food and non-alcoholic beverages consumed. However, during the first eight months of 2020, food sales decreased by 30%, compared to the same months of the previous year, among the eleven countries chosen for the study prepared by Kantar: "Out-of-home food and drinks landscape", in which the impact of Covid-19 on this group is explained and tries to provide solutions to a sector as damaged as the restoration sector.

During the past year, the large increases in consumption occurred in both OOH and IH (In-Home or food at home), 2.5% and 1.9% respectively. However, the Covid has completely changed the current paradigm of food, forcing many locals to reinvent themselves so as not to succumb to the tremors of a crisis that is here to stay. That is why this study attempts to quantify the damage caused to the sector. More specifically, OOH food sales fell, between January and August, by 30% compared to the same period of the previous year.

Regarding the consumption of food at home, the pandemic forced this to increase by 9% compared to the same period in 2019, although the total amount on food will drop 10%, estimated at a total of 13,000 million dollars (about 11,000 million euros). If we refer to the month of April, when the total confinement took place, the data is even worse, with joint falls in OOH and HI consumption of 18%. In the case of food sales in bars and restaurants, losses amounting to 3,000 million dollars (2,539 million euros) were calculated for that month, in addition to the almost 2,000 million dollars (1,693 million euros) during the months May and June.

In countries like France, the United Kingdom or Spain, where the confinements were more severe, food sales in establishments fell by about 40% compared to the first eight months of the previous year. In the Spanish case, in July, more than 80% of consumers returned to establishments to buy food, while in France and the United Kingdom the return to the hospitality sector was 60% in that month and 80% in August. The lifting of restrictions in these countries was very good news for the restoration, which was beginning to see the light at the end of the tunnel.

The consumer shift veered toward a increased consumption at home due to the pandemic, despite the fact that this change in trend has not solved the losses generated by the closing of bars and restaurants in the first months of restrictions. And it is that Indonesia and Mexico have been the only countries in the study that have been able to compensate the losses of the Out-Of-Home with the In-Home consumption.

DRINKS, THE MOST DAMAGED PRODUCT

According to the dossier, the consumption of beverages has suffered a greater impact than that of food itself, when in 2019 it made up 63% of total consumption outside the home (compared to 37% of food). In March, the date the pandemic began, out-of-home consumption of non-alcoholic beverages fell more than 60%, a drop greater than the 40% for food. In August, with a 45% drop in drinks and 22 in food so far this year, it is appreciated how the recovery in consumption was going to be slower than expected.

Regarding the average value of the consumption per share in our country, the price is situated at 1.20 euros for OOH compared to 20 cents IH. This means that a person would need to consume at home six times more to contribute, in terms of value, in the same way as a person consuming a drink in a bar or restaurant. In the case of food, the difference is not so great, where the average price per In-Home share is around 55 cents and 1.1 euros in the case of OOH consumption.

HOME FOOD COMBATS THE FALL OF THE OUT-OF-HOME

The rapid growth of home delivery in countries such as Spain or the United Kingdom allowed the drop in total food expenditure to be reduced by only 9% in April and May, despite the fact that Out-Of-Home expenditure fell by 76% compared to previous year on the same dates. In Spain, use of home delivery became popular among bars and restaurants of the country, with the aim of trying to reach all consumers.

The Horeca (group formed by chains and fast food restaurants), which make up 35% of home deliveries, increased their sales by 170%; traditional locals, which account for 42% of the total home delivery service, their home sales increased by 200%; and the small shops that sell food directly increased 330%.

THREE POSSIBLE SCENARIOS FOR THE END OF THE YEAR

The study, conducted by Kantar, establishes three possible scenarios for the end of 2020. In all three, the hotel industry appears as the fundamental piece. From a more optimistic perspective, the first analysis speaks of a possible rebound in the sector, placing the last months of the year in figures similar to those of 2019. This option would leave Spain with a total sales balance (both OOH and IH) of – 6% and -20% for the 'Away from Home' consumption sector. The second theory that the study handles is that the hospitality market will recover slowly, having witnessed the months of July and August as the determining factors for the progress of the sector. In this case, the drop in total sales would reach 9% and for Out-Of-Home it would drop 28%.

The last scenario contemplated is that of the negative impact that the sector will have due to the tightening of restrictions due to the second wave of infections. Spain would rank as the second worst country in the study, with a fall in total food expenditure of 12%, and in the case of OOH there would be a decrease of 40%.

For the research carried out, the most probable scenario is the third for most of the euro zone countries, although it qualifies some cases where the restrictions are not so harsh. In the same way, even if a rebound happened, the hospitality industry is damaged. Time constraints, capacity control and available space are some of the obstacles that prevent food spending from returning to 2019 levels, but home delivery, for the moment, is safeguarding a part of the sales of bars and restaurants.

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