A big change is hitting restaurants and takeaways in South Africa

After more than two years of Covid restrictions and increased demand, the restaurant and takeaway sectors in South Africa are experiencing structural change, says John Loos, property sector strategist at FNB.

The data points to three key emerging trends:

  • Growth in the overall restaurant, takeaway and catering sector shows signs of slowing, although still strong lately. “This was expected, firstly due to the normalization of activity following the more or less complete shutdowns,” Loos said.
  • Negative economic events are beginning to force consumers to redefine their budget priorities – partly at the expense of restaurants and takeaways. “These (economic) events include rising general inflation, particularly in the area of ​​oil prices, as well as rising interest rates, and a slowdown in the economy that limits household income growth. “Loos said.
  • There is a “structural” shift towards a greater takeaway/fast food/convenience culture, also likely boosted by improved delivery capacity at many outlets. Post-Covid 19 lockdowns, consumers seem much more concerned with convenience and speed, and takeaway/fast food outlets are responding more to this, Loos said.

“The significantly weaker performance of sit-down restaurants and cafes since before Covid-19 has arguably put malls that focus more on this at a relatively disadvantage. Focusing on the Fast Foods and Take Away category during the Covid-19 period seems to have been significantly more beneficial.

Solid performance

Despite a slowdown in spending in recent months, growing takeout and fast food data for May 2022 point to “solid but slowing” growth in tougher economic times, Loos said.

It comes after the takeaway and fast food sector made huge strides during the lockdown period, he said.

“Revenues from takeaway and fast food outlets massively outperformed restaurants and cafes, as well as the food service category. Real revenue for the takeout and fast food category is up a strong 37.4% from May 2019 in real terms.

“Restaurants and cafes, by comparison, are down -29.2% in real terms from May 2019, while caterers are down an even more extreme -38.4% over the same period.”

Read: 30 jobs in demand in South Africa – and how much they pay

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