Although Coronavirus has had a devastating impact on the restaurant industry it hasn’t completely destroyed it. It hit hard because this is an industry that is already hugely affected by recessions.
At the end of April 2020 11.7 percent, 3.4 million people were furloughed, of these on furlough 48 percent were from the hospitality industry. With so many watching their budget and so much uncertainty about job security, it is no wonder people were not invested in eating out.
In March 2020 restaurants around the world saw a steep decline in seated diners before it came to a complete standstill due to lockdowns being in place. These lockdown measures ordered the closing of all pubs, cafes and restaurants in the UK between 20 March 2020 and 4 July 2020. During this period, the entire industry was hit hard despite some restaurants remaining open for delivery and takeaway services.
Adapting to the new rules
Many restaurant owners adapted to the lockdown rules by providing takeaway and delivery services to their customers. This at least helped to sustain some of the smaller businesses that may have otherwise struggled to have any income.
The ‘Eat Out to Help Out’ scheme introduced by the government on 4 August 2020 resulted in a significant increase in the in-restaurant dining. The Monday-Wednesday dining increased between 50 and 100 percent over the 2019 levels. The Thursday to Sunday dining also increased, even though the scheme discount didn’t apply on those days. Unfortunately the scheme ended in September 2020, but it appears to have done enough to reduce the public’s fear of dining out and the figures remained comparable to 2019.
The effects are different regionally
In London however, the eat out scheme saw a much lower impact on the restaurant industry. Something that the government did not address is that the demand for restaurants, cafes and pubs is much lower in areas primarily for production.
With more people working from home, demand became higher for takeaways and places to eat out in more residential areas. They massively decreased in areas like the City of London which are business based.
How much has the restaurant industry recovered since lockdown?
The restaurant industry has definitely been hit hard with the industry seeing almost 10,000 venues permanently closed. A quarter of the hospitality industry venues, 25,000 still have yet to re-open at this time.
We have since seen the beginning signs of recovery, but this is still a very vulnerable industry. Pubs, cafes and restaurants directly employ 4 percent of the British workforce with over 50 percent of those having low education levels (GCSE or lower). This industry is vital for employment of that workforce who may find it difficult to gain employment elsewhere.
Hours worked by restaurant employees were down by 65 percent, compared to a 24 percent decrease in other areas, during the period of lockdown. Spending from UK households also decreased during the lockdown period, but with furloughed employees getting back into work and the slow economic growth across the UK, we are starting to see an upturn in trade.
We can see some evidence of this with figures from the pub industry. Early statistics are showing an average of 50,000 pints a minute being pulled, or 6.8 million pints in one day, during the recent Euro 2020 event.
See the below infographic for more information.