Covid-19 impact on foodservice - and consumer insights on technology in Asia - Food & Hotel Asia
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Covid-19 impact on
foodservice - and
consumer insights on
technology in Asia
Tim Hill
Key insights from GlobalData’s Consumer Surveys and
special Covid-19 reports
tim.hill@globaldata.com
July 2020
+65 81898834
Copyright @ GlobalData PLC. All rights reserved.
Reproduction of part or all of this contents without permission is prohibited.
Agenda
1. Covid-19’s impact on the global economy and the foodservice
sector
2. Consumer preferences with technology in the service sector
Southeast Asia, Australia and the rest of the world
2
Concern Over the Spread of COVID-19 Remains Volatile, Business Optimism Trends
Upward
Poll to Assess Business Sentiment Poll to Assess Concern Related to Spread of COVID-19
as of 13 Jul 2020 as of 13 Jul 2020
How optimistic are you about your company’s growth prospects? How concerned are you about the spread of coronavirus?
• Very optimistic • Very concerned
• Optimistic • Slightly concerned
• Neither optimistic or pessimistic • Neither concerned nor unconcerned
• Pessimistic • Not very concerned
• Very pessimistic • Not concerned
Companies’ View on Future Growth Prospects COVID-19 Concern Index
Optimistic Pessimistic Very Concerned
70% 80%
60%
75%
50%
40% 70%
30%
65%
20%
10% 60%
15-Mar-20 14-Apr-20 14-May-20 13-Jun-20 13-Jul-20 15-Mar-20 01-Apr-20 18-Apr-20 05-May-2022-May-20 08-Jun-20 25-Jun-20 12-Jul-20
Note: Optimistic includes respondents with response as “very optimistic” and Note: Concern index is based on respondents who answered that they are “very
“optimistic”. Pessimistic includes respondents with response as “pessimistic” and concerned” about the spread of COVID-19. The index is based on a total of 157,131
“very pessimistic”. Neutral respondents were discounted from the analysis. 27,200 responses. Calculation based on rolling 7 day average.
responses were received. Calculation based on rolling 7 day average.
Source: GlobalData Analysis 3
The vast majority of respondents have witnessed a negative impact on employment
Respondents report a slight improvement towards employee retention as compared to the previous weeks
as of 12 Jul 2020
100%
90%
Do you see impact on
80%
recruitment in your
company due to
70%
COVID-19 pandemic?
60%
Lay-offs announced
50% Lay-offs expected
Recruitment on hold
40%
No impact
30% Increased hiring
20%
10%
0%
24 Mar- 30 Mar- 06 Apr- 13 Apr- 20 Apr- 27 Apr- 04 May- 11 May- 18 May- 25 May- 01 Jun- 08 Jun- 15 Jun- 22 Jun- 29 Jun- 06 Jul-
29 Mar 05 Apr 12 Apr 19 Apr 26 Apr 03 May 10 May 17 May 24 May 31 May 07 Jun 14 Jun 21 Jun 28 Jun 05 Jul 12 Jul
Note: Analysis based on 25,446 responses received till 12 July 2020. Data represents weekly average responses.
Source: GlobalData Analysis 4
When lockdowns ease, few employees want to return to offices full-time
Even those who worked in offices full-time before lockdowns started, want more flexibility
as of 12 Jul 2020
All respondents Respondents who worked full-time in offices pre-lockdown
26% 23%
29%
33%
45% 44%
When lockdowns ease, if your employer lets you decide, would you prefer to:
Work remotely full time
As of 05 July 2020, all respondents n-2437; Working in offices n-1636
A mix of both
Source: GlobalData Analysis Return to work premises full time 5
Most respondents say it will take a year or more for business travel to return to normal
COVID-19’s impact will be felt long after the pandemic is over
as of 12 Jul 2020
100%
90% Once COVID restrictions are lifted, how long would
you estimate business travel to return to pre-
80% lockdown levels?
70% Business travel will never return to its previous levels
More than an year
60%
7-12 months
50% 4-6 months
40% 1-3 months
30%
20%
10%
0%
05 Jun - 07 Jun 08 Jun - 14 Jun 15 Jun - 21 Jun 22 Jun - 28 Jun 29 Jun - 05 Jul 06 Jul - 12 Jul
Note:
Analysis based on 9,141 responses received till 12 July 2020. Data represents weekly
average responses (except during survey launch week)
Source: GlobalData Analysis 6Consensus Expects a Global Recession
Estimated 2020 GDP Growth
GDP data as of 14 Jul 2020
Real GDP Growth (%) Rate Projections
Forecasters Sound the Alarm
Low Estimate Mean Estimate High Estimate ▪ Industry body, FICCI, projects India’s median GDP growth at -4.5% in FY21, a sharp
-11.5% -7.2% -5.4% downward revision from its previous forecast of 5.5% growth. (July 13)
Canada
-13.0% -6.8% -4.0% ▪ UN forecasts 9.1% contraction in GDP in Latin America and the Caribbean. (July 10)
Brazil
-18.0% -10.9% -8.5% ▪ S&P Ratings forecasts 2020 GDP growth: global -3.8%, Eurozone -7.8%, Asia Pacific
Italy
-1.3%, Latin America -7.1%, US -5%, and Canada -5.9%. (July 9)
-11.2% -9.6% -7.5%
France
▪ Italian think tank, Prometeia, forecasts GDP to contract by 10.1% in 2020. (July 9)
-14.0% -9.8% -7.0%
UK
▪ The Canadian Finance Ministry forecasts the economy to shrink by 6.8% in 2020
India -6.0% -3.3% -0.6% and bounce back next year with 5.5% growth. (July 9)
Germany -8.0% -6.1% -4.3% ▪ Goldman Sachs forecasts the US economy to contract by 4.6% in 2020. (July 6)
Japan -6.2%-5.0% -3.5% ▪ The World Bank forecasts Russia’s 2020 GDP to contract by 6.0%, an eleven-year
low, with a moderate recovery in 2021-2022. (July 6)
China -7.6% 1.1% 3.3%
▪ UNCTAD projects $1.2 trillion loss for the global tourism sector (1.2% of global
US -15.6% -5.9% -3.3% GDP). (July 1)
Worldwide -5.2%-4.0%
-3.0% ▪ Fitch Ratings forecasts the global economy to contract by 4.6% in 2020. (June 29)
-18% -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4%
Note: Estimates on 2020 GDP growth based on multiple broker projections
Source: GlobalData Analysis; National Statistics Office; The World Bank; Broker Estimates; BBC; Twitter; 7
ReutersGlobal & regional summary: All regions set to decline in value
Asia continues to record the steepest
decline in value terms Global slowdown in foodservice by net US$1,105bn in 2020 vs baseline forecast
As of 6th July, 2020
▪ As per GlobalData forecasts, the global
Net US$m difference
foodservice market is likely to lose
$0 Africa Australasia
U$1,105bn in 2020, owing to disruption
East Europe -27.2% -24.8%
caused by the COVID-19 pandemic. - US$ -9,717.1m - US$-17,110.3m
-29.1% Middle East & North Africa
Latin America - US$ -42,940.4m -25.0%
▪ Asia, which accounts for the largest -32.7% - US$ -13,237.0m
regional value share in foodservice, will - US$ -94,636.6m
-$100,000 m
be one of the hardest hit in terms of
1. Global & regional summary
absolute market value loss. Its decline of
US$394.9bn in 2020 is based on the
current slowdown estimates, and is
closely followed by Western Europe and
-$200,000 m
North America. In percentage terms,
North America will experience the West Europe
highest decline of (34.2%), West Europe -29.3%
(29.3%), and Asia (27.2%). North America -US$ -249,684.8m
-34.2%
-US$ -282,752.0m
▪ Latin America is likely to record the 2nd -$300,000 m
highest drop of 32.7% vs baseline in the
latest GlobalData’s COVID-19 Impact
Market Model forecast. Asia
-27.2%
▪ Africa is likely to lose US$9,717.1m in -$400,000 m US$ -394,891.7m
2020, owing to the adverse impact of
the COVID-19 outbreak.
-36% -34% -32% -30% -28% -26% -24%
% difference “slowdown” vs baseline forecast
8
Source: GlobalData Market Analyzers, COVID-19: COVID-19 Impact Market Model – Food Service, accessed on 6th July 2020Asia outlook: 2020 will see a net decline of US$395bn in
In 2020, China will experience the foodservice, with China contributing >50% of the total loss
biggest decline exceeding US$200bn
▪ Holding the largest share of market value, Reduction in total value for 2020 and 2021 vs. baseline
China‘s situation is expected to get better by As of 6th July, 2020
2021, with a decline of US$37.9bn compared
Net US$m difference
to this year.
$0 m
▪ With the rise of new cases in the country, has
forced authorities to take swift actions
including ban of imports from US poultry -$50,000 m
producer and seizure of operations of PepsiCo,
Beijing where new cluster was found1,2.
However, the recommencement of trade,
2. Regional Outlook
commerce and industrial activities in other -$100,000 m
parts of China evident by its record rise of
Purchasing Managers Index* to 58.4 highest in
the decade3. The rebound reflects positive
signs in the coming quarters as China is the - $150,000 m
driving market in Asia.
▪ India, the third largest Food service market by
- $200,000 m
value, now has the third highest number of
positive COVID-19 cases. The shuttered
economy, coupled with record rises in cases,
will further deteriorate sector growth. - $250,000 m
▪ The other largest markets in the region –
Japan, South Korea and Indonesia, are also
registering significant decline in the
foodservice sectors. In these economies, there
is a heavy reliance on online delivery services;
with this trend likely to stay in the market for 9
Source: GlobalData Market Analyzers, COVID-19: COVID-19 Impact Market Model – Food Service, accessed on 6th July 2020; [1] John Hopkins,22 June, 2020; [2] Economic Times, 21 June’20; The
the medium to long-term. Globe and Mail, 3 July 2020; *The Caixin/Markit servicesAustralian foodservice will see a Australasia outlook: Forecast decline of US$17.1bn in 2020
steep decline in 2020
▪ The Australian foodservice market is expected
to witness a decline of US$14.9bn in 2020. Reduction in total value for 2020 and 2021 vs. baseline
With stringent rules to avoid the spread of the As of 6th July, 2020
virus, food service chains/restaurants are
limited to accepting only take-away orders
that will severely impact their businesses. The Net US$m difference
rise of cases in hard-hit state such as Victoria $0 m
has resulted in the sealing borders with New
South Wales will further impact the economic
activities. However, the sentiment will
improve in 2021, as the forecast decline vs.
-$5,000 m
the baseline forecast reduces to US$2bn.
2. Regional Outlook
▪ New Zealand’s recovery will be faster than
Australia, given the size of its foodservice
sector. In 2021, the country will experience a -$10,000 m
forecast decline vs the baseline of US$253m.
As the country was in line to be the first
COVID-19 free nation, but the two new cases
on 17th June and 3 new on 5th July diluted the -$15,000 m
signs of end of pandemic in the country as the
total count rose to 22 as of 6th July 20201,2,3.
Consequently, few of the restrictions were
reinstated. -$20,000 m
▪ However, the effective implementation of Australia New Zealand
precautionary measures has helped both
island nations succeed in containing the
outbreak. Subsequently, the Australian
government also laid out a 3-step plan from
reopening of retail shops and cafes, to easing
10
restrictions on pubs, bars and clubs with
Source: GlobalData Market Analyzers, COVID-19: COVID-19 Impact Market Model – Food Service, accessed on 6th July 2020; [1]The Spinoff, 22 June 2020 [2] New Zealand
reduced capacities. herald, 5 July 2020; [3] Health Government, New ZealandFoodservice
Operators are being negatively impacted by lockdowns despite the availability of take-away and drive through services
Active job listings remain above YTD average, driven by a spike early in the year as well as a surge in demand for delivery services
Equity Index Active Jobs Deals Index
Market Index Jobs Index M&A Volumes
200
125 150
150
100
100
100
75
50
50
50
0 0
25 Jan-20 Mar-20 May-20
Jan-20 Mar-20 May-20 Jun-19 Dec-19 Jun-20
News Sentiment & Volume Quarterly Filings Sentiment WoW MoM YTD
Positive News Negative News Positive Score Negative Score
50 50 INDICES
Equity -3.5% -0.9% -23.9%
25 25
Jobs 0.2% 9.8% 19.1%
0 0 M&A - -42.9% -91.2%
SENTIMENTS
-25 -25
News - 2.4% 1.6%
-50 -50
Jan-2019 Jul-2019 Jan-2020 2019 2020
Filings - - -73.5%
as of 25 Jun, 2020 11
Source: GlobalData Analysis; Press Articles; Company Announcements; Company WebsitesFoodservice COVID-19 value chain impact
COVID-19 could change longer-term consumer behavior, the most successful companies will alter their strategies to accommodate this
Equipment Suppliers Food & Beverage Catering Service Channels & operators Food Delivery
Suppliers Providers Specialists
COVID-19 has sparked
Short term sales will be The contract/cost-sector Those that remain open
Restaurant closures will increased demand for
Short-term negatively impacted by is likely to experience a will have to rely on
be damaging for food food delivery; however
impact companies cutting revenue reduction of drive-through and to-go
and beverage suppliers. supply is limited by
costs. 15%. models.
closing restaurants.
As restaurants begin to
As events, schools and Social distancing
The slow, drawn out open with social
Companies begin to get measures will decrease
Mid-term recovery of restaurants distancing measures Likely increased uptake
ack to normal, catering restaurant capacity,
impact will be passed on to demand will increase of online delivery.
service providers negatively impacting
equipment suppliers. but lower than previous
revenues will increase. revenue.
years.
Cost- All channels will undergo
The slow, drawn out a slow and painful
Delayed or cancelled sector/contract
recovery of restaurants Alternative methods of
Long-term restaurant openings will arrangements will recovery from the deep-
will be passed on to seated effect on delivery will be
impact negatively impact require
food & beverage consumer behaviour and explored, e.g. drones.
equipment suppliers. restructuring.
suppliers. household spending.
Source: GlobalData Significant negative impact Moderate negative impact No impact Moderate positive impact Significant positive impact 12Foodservice COVID-19 Sub-sector impact
Pubs, Clubs & Bars are among the worst hit food service channels amid the COVID-19 pandemic
Coffee & Tea Shops Widespread closures of Coffee and Tea shops will negatively impact revenues, the recovery will be slow and drawn out,
while smaller and independent shops will be hit harder than large chains.
Full-service Full-service restaurants are entirely reliant on delivery partners during the outbreak, and the impact is likely to be felt
restaurants more in regions such as West Europe, Asia and North America which are the epicentres of the outbreak.
Fast food chains are reliant on their drive-through and take-out operations, and the impact of COVID-19 is set to be felt
Fast Food
through to 2023, though their recovery is expected to be more rapid compared to full-service restaurants.
Pubs, Clubs & Bars are set to experience significant decline in 2020 vs its baseline forecast, second only to the restaurant
Pubs, Clubs & Bars industry. COVID-19 has forced companies in this sector to close, and many smaller locations will be unable to make a
profit upon reopening as long as strict social distancing measures are in place.
Cost Sector Companies in the cost sector are planning for significant revenue losses as a result of Covid-19, with releases from
leading players such as Aramark indicating a 15-20% drop in revenues this year.
The closure of fast food chains and restaurants has negatively impacted revenues of food delivery companies. Amazon
Home Delivery
recently injected a $500m investment into Deliveroo to save the company from collapse.
Source: GlobalData Significant negative impact Moderate negative impact No impact Moderate positive impact Significant positive impact 13Accommodation: Hotel & Motel outlets are severely hit with
projected losses of US$92.5bn in 2020
Sharp drop in customer numbers
expected at hotels and motels Change in market values by outlet type and region
As of 6th July, 2020
▪ The Hotel & Motel foodservice
segment is one of the biggest
casualties of the coronavirus
outbreak in 2020. The channel will
continue to record low revenues in
the current year, forcing
consolidation and closure of small
and medium scale establishments.
3. Channel Outlook
▪ The accommodation segment is
backed by the travel and tourism
sector. Therefore it is one of the
hardest hit with long lasting effects.
People are less likely to travel amid
safety concerns, while all major
airlines are barred from international
and domestic operations amid
tightening restrictions.
▪ As travel restrictions look to be lifted
in many countries only for business
travels, a ray of hope emerges for the
accommodation sector that is
currently incurring heavy losses.
▪ Also few European countries such
Italy , Greece, Portugal and Iceland
are welcoming European travels will
14
help run the accommodation sector.
Source: GlobalData Market Analyzers, COVID-19: COVID-19 Impact Market Model – Food Service, accessed on 6th July 2020Foodservice COVID-19 thematic score
To go and delivery options offer a way for companies to mitigate the impacts of COVID-19
2 McDonald's: Since mid-March, McDonald's has had a significant 2 Dunkin' Brands: Restaurants remain open for to go and delivery
decline in results
Chipotle: Same-store sales down 35% in the last two weeks of March,
Starbucks: Temporary café closures and modified operations until 3rd
2 2 the number recovered to the negative high teens in the second week
May
of April
Restaurant Brands Int: Sending $70m in cash advances to restaurant Sodexo: Reduction in revenues in H2 of between €2.4 and €2.8 bn
2 1 compared to the previous year,
owners
2 Yum! Brands: Closing 7000 restaurants worldwide 2 :CFA Properties: The company has closed all dine-in operations
5 Domino's Pizza: first-quarter sales were up 4.9% in the U.S., while 2 :Roark Holdings: The company has closed all dine-in operations
international stores were up 6.8%
Aramark: The Company believes revenue declines would have a drop
4 The Wendy's Company: Sales increased by 2.8% and there has been 2 through of approximately 15%-20% on operating income
significant increase in drive thru sales
Dine Brands Global: The company has withdrawn its 2020 financial Whitbread: The company has closed its restaurants and put staff on a furlough
2 performance guidance issued on February 24 1 scheme
Compass Group: With just over half of the business closed, operating
2 Darden Restaurants: Darden’s ongoing weekly cash burn rate is about 1 profits will be around 28-29% lower than expected
$20 million and relies on its to goo operations
2 Brinker Intl: Restaurants remain open for to go and delivery 1 Autogrill: Sales dented by €190m, shares have also plunged 18.2%
1 Jolibee: Jollibee shares have dived almost 25% this year 1 J D Wetherspoon: All pubs are hotels have been closed due to COVID-19
Source: GlobalData 1 Significant negative impact 2 Moderate negative impact 3 No impact 4 Moderate positive impact 5 Significant positive impact 15ASEAN consumers much more likely to consider themselves as spenders
“All things considered, do you consider yourself to be a spender or saver? ” - % respondents saying
‘Spender’
36% 45% 37%
16
Source: GlobalData Consumer survey 2018 Q4 29,663 respondents, global average 36%ASEAN consumers more positive about the impact of social media
“Do you think the following concepts will have a positive or negative impact on society in the future?” - %
respondents indicating ‘positive’
48% 60% 30%
17
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 48%ASEAN consumers more likely to be influenced by how digitally advanced/
"smart" the product/service is
“In general, which of the following features has the greatest influence on your choices of
products/services?” - % respondents indicating ‘always’ or ‘often’ influences product/service choice
43% 59% 28%
18
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 43%ASEAN consumers more likely to accept digital assistants e.g Siri, Alexa
“Do you think the following concepts will have a positive or negative impact on society in the future?” - %
respondents indicating ‘positive’
45% 54% 37%
19
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 45%ASEAN consumers more likely to appreciate automated home (e.g. smart
appliances which link to mobile apps)
“Do you think the following concepts will have a positive or negative impact on society in the future?” - %
respondents indicating ‘positive’
59% 65% 42%
20
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 59%ASEAN consumers more likely to appreciate the internet of things
“Do you think the following concepts will have a positive or negative impact on society in the future?” - %
respondents indicating ‘positive’
48% 66% 35%
21
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 48%ASEAN consumers more likely to accept personalized product recommendations
based on “how I look, using automatic facial recognition technology”
“How appealing do you find the following concept” - % respondents indicating ‘somewhat appealing’ or
‘very appealing’
48% 70% 28%
22
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 48%ASEAN consumers more likely to accept robotics
“Do you think the following concepts will have a positive or negative impact on society in the future?” - %
respondents indicating ‘positive’
49% 51% 38%
23
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 49%ASEAN consumers more likely to accept being served by robots instead of
humans when eating out of home
“How appealing do you find the following concept” - % respondents indicating ‘somewhat appealing’ or
‘very appealing’
31% 49% 19%
24
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 31%ASEAN consumers more likely to accept being served by robots instead of
humans when staying at a hotel
“How appealing do you find the following concept” - % respondents indicating ‘somewhat appealing’ or
‘very appealing’
31% 49% 20%
25
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 31%ASEAN consumers more likely to accept being served by robots instead of
humans when shopping
“How appealing do you find the following concept” - % respondents indicating ‘somewhat appealing’ or
‘very appealing’
32% 52% 20%
26
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 32%ASEAN consumers more likely to accept Online orders being delivered by
automated devices (e.g. drones, driverless cars)
“How appealing do you find the following concept” - % respondents indicating ‘somewhat appealing’ or
‘very appealing’
47% 67% 28%
27
Source: GlobalData Consumer survey 2018 Q3 29,663 respondents, global average 47%The new normal?
28Tim.hill@globaldata.com +65 81898834 Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that GlobalData delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such, GlobalData can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect.
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