After more than two years of Covid restrictions and increased demand, the restaurants and takeaway sectors of South Africa are seeing a structural shift, says John Loos, strategist for property sector at FNB.
The data point to three important emerging trends:
- Growth in the General Restaurant, Take-Away and Catering Sector shows signs of slowing down, though it’s still stuck lately. “This is expected, initially because of the normalization of activity after lockdowns have more or less been completed,” Loos said.
- Negative economic events begin to force consumers to re-prioritize their budgets – partly at the expense of food and collection. “These (economic) events include rising general inflation, especially in the area of gasoline prices, as well as rising interest rates, and a slow economy that is limiting the growth of household income,” Loos said.
- There is a ‘structural’ shift to a larger take-away / fast food / convenience culture, also likely stimulated by the improved delivery capabilities of many outlets. Post-Covid 19 lockdowns, consumers appear much more concerned about convenience and speed, and take-away / fast food outlets take more care of this, Loos said.
“The sharply weaker performance in sit-down restaurants and coffee shops since before Covid-19 has apparently placed retail centers with a greater focus on this at a relative disadvantage. A focus on the Fast Foods and Take-Aways category by the Covid -19 period seems to be significantly more advantageous.
Despite a slowdown in spending in recent months, the growing data on take-away and fast food for May 2022 points to ‘solid but slowing’ growth in more difficult economic times, Loos said.
This comes after the take-away and fast food sector made enormous inroads through the lockdown period, he said.
“Revenues from take-away and fast-food stores have outperformed restaurants and coffee shops, as has the Catering category. Real income from the Take-Away and Fast Food category is a strong 37.4% up from May 2019 in real terms.
“Restaurants and coffee shops, by comparison, are -29.2% in real terms from May 2019, while Caterers are an even more extreme -38.4% less over the same period.”
Big shift hits restaurants and takeaways in South Africa
Source link Big shift hits restaurants and takeaways in South Africa