Slump In Eurozone Bars And Restaurants In Stark Contrast To Soaring Food Sales

Food retail: sales remain at a higher level for now

For food retailers clearly, it works the other way around. The longer it takes for restrictions to be eased, the longer they will experience these elevated sales levels. The 6% growth of turnover in January 2021 across the eurozone is a good illustration of that. However, from March onwards, growth rates in food retail will become less pronounced, because year-on-year it will be hard to beat the March 2020 stockpiling boost.

Impact on the food industry: striking a different balance

The shift in consumption patterns is also felt in the supply chains. Production in the food and beverage industry in the eurozone fell by almost 3% in 2020, mainly due to lower demand from foodservice operators. However, the impact differs from company to company and is very much dependent on the level of exposure to both food retail and foodservice.

The beverage industry (including brewers and soft drink producers) is on average more exposed to the foodservice channel. For them, and many other food producers, shifting some of the lost volumes towards the less profitable retail channel provides some compensation. As such, a reopening of restaurants and bars across Europe will clearly boost food and beverage industry output, but a return to pre-Covid levels in 2021 is not likely.

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