The Philippines’s food service sector is expected to shrink further this year to $7.4 billion following a 44 percent fall in 2020, on the weight of the spread of COVID-19’s Delta variant as well as the government’s abrupt implementation of different quarantine restrictions.

This is according to the United States Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) here in Manila (Post), which now expects the Philippine food service sector to fall further by 13 percent to $7.4 billion in 2021 from $8.54 billion in 2020.

Based on FAS Research and Euromonitor International, the country’s food service sales have been consistently on an uptrend from 2015 to 2019. It even peaked in 2019 to $15.19 billion before plunging by 44 percent to $8.54 billion due to the pandemic.

“FAS Manila projects total consumer food service sales will decline by 13 percent in 2021. Based on research and interviews, the affected sectors include: full-service restaurants by 20 percent, limited-service restaurants by 10 percent, cafes and bars by 15 percent, and kiosks by 15 percent,” Post said.

Post then pointed out that lacking close coordination of the government with the private sector, lockdowns continue to surprise food and beverage establishments, leading to losses.

“To date, abrupt changes in government regulations continue to impact dine-in and events, severely affecting the food service sales and delaying the recovery of food and beverage stores. Moreover, some owners closed establishments due to low foot traffic while others converted some hotels into quarantine facilities,” Post said.

“Abrupt implementation of government restrictions such as checkpoints, quarantine passes, curfew, and liquor bans created logistical problems and low foot traffic,” it added.

For full-service restaurants, in particular, Post estimates combined sales to decline by 20 percent from $1.48 billion in 2020 to $1.13 billion this year. Last year’s drop was even higher at 56 percent from combined sales of $3.21 billion recorded in 2019.

“Consumers remain hesitant to dine in restaurants, as restaurants manage the safety measures amid changing regulations and requirements,” Post said.

Asian stores, including Filipino restaurants account for majority of the market, followed by pizza and American restaurants. Shakey’s, a pizza chain, accounts for 30 percent of full-service restaurant chains. Other major players include Max’s, a local fried chicken company (15 percent) and Pizza Hut (12 percent).

As for fast-food chains, sales will only slightly go down as a little recovery has been observed in the past few months. For this year, Post said that combined sales could go down only by 10 percent from $4.76 billion in 2020 to $4.28 billion in 2021. In 2019, combined sales was around $7.15 billion.

“Limited-service restaurants have fared slightly better than full-service restaurants during the pandemic. On top of having a wider area coverage, limited-service restaurants have pre-lockdown delivery, pick-up and drive-through services for chicken, pizza, and bakery products,” Post said.

Jollibee Foods Corp. represents half of the industry, and their sales declined from limited-service restaurants from fewer dine-in customers.


Source: Manila Bulletin (https://mb.com.ph/2021/10/06/ph-food-service-sector-seen-to-further-slowdown-to-7-4-b-this-year/?utm_source=rss&utm_medium=rss&utm_campaign=ph-food-service-sector-seen-to-further-slowdown-to-7-4-b-this-year)