Eating out market share of food and drink sales halved last year, leaving many businesses likely to close in Q2 2021, according to IGD’s Eating In vs Dining Out report.

The significant dip in foodservice, from 36% in 2019 to 19% in 2020, contributed to an overall 12% fall in total food and drink sales year-on-year, despite a 9.9% rise in sales in the retail space.

As eating out dropped, grocery retail share of the market grew, rising from 64% of the total market in 2019 to 81% in 2020.

Looking to ahead, the report said that consumer behaviour, government support, supply chain resilience, the lasting impact of the economy and labour market, and EU exit will all play a part in shaping the market this year, and that Q2 2021 will prove critical for businesses.

“Without any current indication of when the industry will reopen or government support, many businesses are sitting on a knife edge,” said foodservice consultant Peter Blackman.

“We’ll see property debts, plus substantial hospitality costs due and the end of support measures, which will sadly mean that many businesses will have no choice but to shut up shop.

“That said, the swift roll-out of the vaccine and an increase in consumer confidence are likely to paint a brighter picture for the second half of the year.”