Restaurant costs for 2020 will be much lower than initially forecast as consumers spend more of their dining-out budgets at grocery stores instead, according to an updated food price report that predicts annual restaurant sales will be slashed in half.
“It all comes down to … the result of people having to change the way they buy and consume food,” said Simon Somogyi, a University of Guelph associate professor who co-authored the report with Dalhousie University professor Sylvain Charlebois.
The COVID-19 pandemic has seen restaurants across the country close or shift to delivery and pick-up models amid efforts to contain the COVID-19 pandemic. Sales plummeted at many restaurants.
“The food industry is being decimated as the result of COVID-19,” the report reads.
The initial report from researchers at the two universities anticipated restaurant prices would jump between two to four per cent in 2020, but that has now been revised downward. Researchers didn’t provide a new percentage range because they can’t do so with total confidence in a rapidly changing environment, said Somogyi.
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Restaurants typically generate more than $90 billion in annual sales, but the researchers expect $40 billion to $50 billion of that will shift to grocery stores throughout the pandemic.