Published 25 June 2020
As food businesses around the world are slowly being permitted to reopen, there are significant challenges to face. Results from several surveys and reports indicate that food businesses are struggling with whether to reopen or not, and wondering if local customers will return.
A recently released report has revealed some startling figures about food businesses as reopenings begin in the United States. A survey was conducted with 3,800 restaurant operators in the United States from May 15 to May 25.
Of those surveyed, 75% of restaurant operators do not believe they will make a profit within the next six months. The survey also revealed that 76% are open in some capacity, while 27% remain temporarily closed. This points to another significant finding: even though food businesses are being given the green light to reopen, many are choosing to stay closed for now. Survey results indicate that this could be because of the strong belief that they will not turn a profit anytime soon, or it could be due to concerns about whether customers will even return if the food business reopens. According to the results, of those businesses that are still temporarily closed, 55% say there are not enough customers to justify reopening again. Out of the food businesses that are open in some capacity — such as conducting take-out and delivery — 34% state that there are not enough customers to make reopening worth it.
Along with hesitations about reopening, the report also revealed concerning figures about the overall losses to the US food industry. At the height of the pandemic, more than 8 million restaurant employees were unemployed — many of which are still waiting to return to work at this time. The closures of food businesses caused a loss of $30 billion in March, $50 billion in April, and $40 billion in May bringing the total to $120 billion lost in sales in the food industry during that past three months.
These struggles and losses are not isolated to the United States. In a recent survey conducted on Canadian restaurants, survey results revealed that losses are being felt, even in those food businesses that are open in some capacity (e.g. providing take-out and delivery). Out of those who are open in some capacity, 60% said they were operating at a loss. For Canadian restaurants that have been permitted to reopen for dine-in service, less than half said that reopening had a positive impact on their operations. Alternatively, over a third said that reopening has actually had a negative impact on their operations. These results indicate that simply reopening food businesses will not immediately undo the damage that has been done over the past three months.
In other locations around the world such as Australia, there appear to be similar struggles for food businesses. Australia has seen major advancements in its reopening, with food businesses across the country reopening based on their state or territory guidelines. Despite the move in a positive direction, hesitations still run high among the public. In a recent survey by the National Australia Bank, Australians continue to express a high level of concern over the pandemic. When asked about behavior changes the respondents plan to make as the country reopens, not eating out at restaurants (or limiting it) was scored high among most of those surveyed.
The UK is seeing similar trends as food businesses begin to reopen. Research published by the Scottish Tourism Alliance reveals that the restaurant industry is teetering on the brink of significant closures and job losses. The results show that 85% of restaurants would not be able to financially sustain themselves after September without further government support. Food businesses also indicated that the physical distancing measures that they will have to implement in order to reopen are impossible to uphold and will cause them to lose business. Out of those surveyed, 87% said that they would lose more than 50% of their business if implementing the ‘two-metre rule’ was mandatory.
What all of this research reveals is that the food industry is struggling worldwide. Reopening food businesses is not going to be a quick fix for the industry, as many businesses will be struggling to regain their losses for months and years to come. The research also points to key factors for survival, such as a need for more financial support for food businesses, especially smaller businesses. As food businesses continue to reopen over the next few months, what the future of the food industry will be will begin to emerge.