The contrast between the sales highs of the supermarkets and the all-time lows of hospitality and foodservice could not be starker at this moment in time.
But surely fortunes must turn? Unfortunately, we live in unprecedented times with chronic uncertainty. To their credit, governments around the world are intervening and taking previously unimagined steps to help mitigate the prospect of a worst-case scenario. It is now to be hoped that a global depression will be avoided, though the universal expectation is that a recession is inevitable this year. The extent this constitutes a modicum of good news is a moot point, but for those unsure of the difference, a recession is apparently where your neighbour loses their job, a depression is where you both.
Trying to find more crumbs of comfort, it could be pointed out that several economists are predicting that we are likely to experience a short sharp shock of a recession. This is something more V-shaped, and more river- than glacier-derived and U-like. Clearly however, the longer the out of home shutdown is in force, the weaker corporate and consumer confidence becomes and the more time consumers have to adopt revised behaviours – not least embracing more cooking/preparation from home, watching more at-home entertainment and using more social media – then the odds on a flatter bottomed U-shape, or on an elongated swoosh-shaped, slower recovery, multiply.
That said, an alternative view, or maybe a naively idealistic one, is that consumers will come to appreciate eating and drinking out more after having had it taken away. Initially that may be the case, but whether it is associated with a more generous unlocking of wallets is unlikely. It might be hoped that a temporary closure would allow brand custodians time to reflect on how best to reignite enthusiasm for their businesses. Unfortunately, in the inevitable scramble for share of mind and footfall, promotional activity will have to be reactivated.
Some good news for some should come from a prospective recalibration of property costs. Landlords will have to accept a new sense of realism, because the odds are on a reduced roll call of operators surviving the recession, despite the Government assistance. Concerns around over-supply had been building up, and a cull of weaker players will accelerate a market correction, and at least help owners of more relevant, better managed and stronger brands.
Some diversity and talent from the market will be lost, but ultimately, the out of home sector will recover. It has amassed a substantial bank of consumer goodwill through a long-standing tradition of cheerfulness, of inventiveness and of creating uniquely special social moments, that will never be replaced by what is offered from supermarkets and staying in.
Steve Gotham: A tale of two markets – and the search for good news
The contrast between the sales highs of the supermarkets and the all-time lows of hospitality and foodservice could not be starker at this moment in time. But surely fortunes must turn? Unfortunately, we live in unprecedented times with chronic uncertainty. To their credit, governments around the world are intervening and taking previously unimagined steps to help mitigate the prospect of a worst-case scenario.