Has COVID-19 changed consumer spending habits for good in the hospitality sector?

After 12 months of lockdown measures in the UK, the end is now in sight. With hospitality looking to open up in the next coming months, the sector is hoping to bounce back to where it once was.

Restaurants, nightclubs and bars have adapted to meet the 'new normal' that's forced temporary closures of non-essential shops and hospitality outlets. For example, we've seen a dramatic boost in the number of outlets servicing consumers through takeaway options and delivery services because of this need to keep doors open. From October to December 2020, JustEat witnessed a spike in the use of its services, recording a 400% growth compared to the previous year's quarter.

Have consumer habits changed during COVID-19?

As consumers could no longer venture out to their favourite restaurants or try exciting new cuisines, they chose to recreate these experiences at home. And this way of dining is likely to continue in the long-term, which is good news for delivery services. Click-and-collect and takeaways reduce the overheads required by a takeaway provider, meaning they can capitalise on profit margins far more than if they were to offer an in-house setting.

With the proven success of the takeaway business model and this boost in small business support, where is the hospitality sector heading? According to Statista, 84% of food-led businesses opened up after the first UK lockdown for takeaway services, so it's a pretty robust strategy.

How the hospitality industry is bouncing back

What's more, the Eat Out to Help Out scheme encouraged nationwide consumer spending - the hospitality sector benefited from the 30% increase in spending as a result. The unprecedented economic effect of the UK lockdown has made consumers more conscious about where their money is going. Noticing the greater effect that their hard-earned money has on small businesses throughout the country has boosted consumers' willingness to fuel the hospitality sector post-lockdown. 48% of UK consumers will support small business recovery as 41% know somebody personally affected by the temporary closures.

This industry-wide focus on added convenience has resulted in Greggs planning to open 100 new shops across the UK despite seeing a loss during COVID-19. The expansion is, in part, down to its successful partnership with JustEat, with delivery accounting for 10% of its turnover in the first 10 weeks alone. Greggs has seen consumer spending grow through diversification, which is great news for anyone who's not averse to an infamous sausage roll or a steak bake.

Ultimately, consumer interest has really impacted the hospitality industry in a positive way. With the public taking its side and wanting to boost its longevity, the future is looking bright.