COVID-19 sparked “structural shift” in consumption patterns: economist
UBS’ Carlos Cacho urges QSR businesses to ensure good relationships with delivery networks.
The shift in consumption patterns due to COVID-19 is projected to extend, making it more important for chains to seriously consider seeking growth in delivery and takeaway channels in the coming months.
“I certainly think there’s a structural shift towards eating at home from eating in restaurants...that’s just going to make it even more important that [businesses] have good relationships with either your own delivery network or an aggregator,” UBS economist Carlos Cacho explained at the recently-held QSR Media Sandhurst Fine Foods Conference & Awards.
Whilst seeing a majority of households eating at home, Cacho revealed an increase in takeaway orders, expecting the trend to continue. Food delivery and takeaway, currently at 2%, is forecasted to reach 4%.
“That’s largely going to be at the expense of in-store or seated dining,” he said, noting that they expect this category to fall to 10% compared to its current rate of 16%.
Citing consolidated data from Google and Open Table, foot traffic is rebounding yet down 20% compared to normal levels. Dining-in bookings, meanwhile, are still down by 80%.
Consolidation across retail, Cacho says, is also a key theme they anticipate as the sector recovers, seeing how larger brands are performing better compared to smaller counterparts.
In terms of UBS’ larger outlook for Australia, Cacho says they expect growth to fall by 8% in the June quarter, but anticipate a strong rebound next year. Interest rates remain low to keep borrowing costs down for both households and businesses.
Employment is expected to fall by 7%, seeing close to a million jobs lost. Wages will remain flat, citing lower wage agreements or lower minimum wage rises seen in recent years.
Unemployment rate is projected to reach 10%, but says it will gradually decline.
Cacho cited the easing of restrictions and the government’s set of stimulus packages as some positive areas in the country’s road to recovery.
“It’s certainly a challenging environment, but Australia seems to be navigating this crisis a lot better than a lot of other countries...we seem to be through the worst of the pandemic period,” he said.
