Tracking the Pandemic’s Impact on Canadian Foodservice

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When the COVID-19 situation threw the Canadian economy into shutdown in mid-March, the restaurant industry was impacted immediately and hard. The shutdown devastated restaurant traffic. In April, NPD recorded a 43-per-cent decline in restaurant visits. By the end of October, the decline had been cut in more than half, marking some hope for an eventual recovery, but much work remained.

The early days of the COVID-19 pandemic saw a rush on groceries as people stocked their pantries, freezers and refrigerators with essential supplies. The NPD Group’s Retail Tracking Service shows they also equipped their kitchens with all of the latest gadgets and appliances, such as multi-cookers, grills, bread machines and coffee makers. And yet, they continued to turn to the foodservice industry for some of their meals and snacks, sustaining some of their old habits while also forming many new ones that are re-shaping the industry.

The two immediate trends that emerged during the lockdown were the shift to off-premise traffic occasions and a surging reliance on digital-ordering platforms. During the first eight months of the COVID-19 period, off-premise access modes accounted for 84 per cent of all restaurant occasions. The largest shift in off-premise traffic was at drive-thru windows. This resulted in long lineups as operators struggled to adjust to the increase in customers, plus an increase in order sizes as more and more family-sized orders went through the window. Operators with the best-developed drive-thru infrastructure outperformed the rest of the market during this time.

While drive-thru grew most when looking at visits, delivery was the fastest-growing access mode. Delivery doubled six months in a row versus the prior year, reaching as high as 14 per cent of foodservice traffic in April. This shift to delivery has been a boon for third-party delivery service providers and has helped many operators survive during the early days. It also became the basis for a series of community-driven events encouraging Canadians to support the restaurant industry by ordering delivery and/or take-out meals from their favourite local restaurateurs. This support encouraged many restaurants to re-open just to service these off-premise customers, helping to bring in a bit of income while they waited for the all-clear to welcome customers back on premise.

The duration and depth of COVID-19’s impact on the Canadian economy at large, and the foodservice industry in particular, will remain uncertain for the foreseeable future. But one thing is clear: The trends that existed prior to this period and accelerated through 2020 can be expected to continue into the future. Key trends include digital ordering, offering deals, delivery and the design (or re-design) of future restaurants.

COVID-19 has changed the Canadian foodservice landscape forever. In just a matter of months, this crisis has eliminated years of growth and facilitated a decade of evolution. But consumers in Canada love their restaurants and are eager to return. They love hanging out with friends and family to enjoy the experience, the atmosphere and the food. These are all things no home-cooked meal can replace. As soon as they feel safe and have the means, people will return to restaurants in one way or another. And with the vaccine officially approved in Canada, let’s all hope that day comes sooner than later.

By Vince Sgabellone
He is a foodservice industry analyst with The NPD Group.

He can be reached at vince.sgabellone@npd.com

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