Home » Business » Food retailing: Demand surge for supermarkets due to virus crisis

Food retailing: Demand surge for supermarkets due to virus crisis

Closed schools and day-care centers, canteens in emergency operation, empty pubs and cafes: the spreading corona virus and the increasing restrictions in everyday life are also reflected in consumer behavior.

There is more cooking and eating at home – restaurants as «public living rooms» are avoided. According to observations by food retailers and industry experts, this should lead to different and more shopping in supermarkets. Delivery services are also currently benefiting. By contrast, food retailers specializing in major customers would have to expect significant losses, according to the experts. The precarious situation for hotels and restaurants is having an impact on wholesalers and wholesale markets.

The drop in demand from restaurateurs, hotels, daycare centers and canteens is clearly noticeable, says Marcus Schwenke, managing director of the Foodservice wholesale association. Break-ins are expected to be slightly delayed in the hospitality industry. Should insolvencies in the catering industry increase, this could have dramatic consequences for wholesalers – long after the pandemic ends, the association, which represents providers such as Metro and Selgros / Transgourmet, fears.

The warnings from the Hotel and Restaurant Association Dehoga do not bode well. “The drop in sales is unprecedented,” Dehoga President Guido Zöllick raises the alarm. Private demand is also noticeably declining: «In the meantime, the entire industry in the entire Republic – whether hotels, restaurants, caterers, pubs, bars, discotheques and clubs, whether company, stadium and traffic catering – is suffering – whether in the city or on the country.

If you follow experts from the Boston Consulting Group (BCG), food retailers can expect a sustained plus of 10 to 15 percent not only in Germany “over several weeks”. There are two main drivers: On the one hand, customers are storing hygiene and health products. On the other hand, people avoided restaurants and spent more time at home. The online business has recently grown rapidly. However, for fear of infection, consumers could limit their stay in the supermarket, which in turn should dampen the demand for fresh products.

See also  Municipal: it is the Doublet company which manufactures tricolor scarves

BCG retail expert Markus Hepp has three phases in Germany in the coronavirus crisis. In the first wave of the crisis, products such as disinfectants or cleaning agents were bought to a large extent. In wave two, inventories were formed after it was clear that long-term effects could be expected.

Germany is currently in wave three: there are sometimes severe restrictions in social life. This increases the demand for fresh products. But also after ready meals, because there is more cooking at home, says Hepp. “Of course, this is reflected in the sales figures of these categories, where we saw 10 to 20 percent growth in the Italian market, for example.” Wholesalers for restaurants or hotels are particularly badly affected, where demand is likely to drop by up to 30 percent.

The Nuremberg research institute GfK had identified unusual sales leaps in the supermarket chains a good week ago: sales of ready-made soups in food retail had increased by 112 percent compared to the previous week, with fish and fruit preserves by 70 percent and pasta by 73 percent. The entire food retail sector had thus recorded an increase of 14 percent over all goods during this time. Certainly a one-off effect, but the current retreat into the private sector should continue to ensure good business.

Online grocery and food delivery services could also be among the winners. In any case, investors get an appetite for the shares of listed food suppliers. The providers themselves are cautious for the time being. The Delivery Hero delivery service, for example, is currently registering a “slight increase in customer demand”, “as more and more people are deciding to order their meals and groceries online to avoid overcrowded rooms”. But there are “no big changes” in global growth.

See also  4 strong Cryptocurrencies ready to rise to buy now - Where to Invest

You are buttoned up at the Hellofresh cookbox mail order company. One could “react very quickly to fluctuations in demand”. However, no information is given on the current order volume. The industry also responds this way: Lieferando couriers only place ordered food at the front door to contain the risk of infection, as the Dutch Lieferando mother Takeaway said.

Leave a Comment