What do easing restrictions mean for the recovery of the food services sector?

The Australian Treasury estimates that at the end of March nearly one million people had lost their jobs as a due to COVID-19 pandemic, of which close to one third have been in the accommodation and food services sector https://www.abc.net.au/news/2020-05-05/almost-one-million-australians-lose-jobs-due-to-coronavirus/12215494.

And given the dominant demographic, that means that younger people have been hit hardest with job layoffs – more than 18% of those under 20 and about 12% for those under 30 years old.

However, with governments around the country now actively easing social distancing restrictions, the hospitability sector is set to reopen, albeit in a limited and staged manner. So, what does the easing of social restrictions mean for the food services sector?

In Victoria, as an example, the State Government has announced the easing of restrictions, in line with other Australian governments, which will see restaurants and cafes able to open their doors from 01 June for a maximum of 20 patrons for each discrete enclosed space, increasing to 50 patrons from 22 June and up to 100 patrons from the middle of July – when pubs and clubs can also open their bars.

Those businesses that have been able to survive the financial impacts of the closures will breathe a sigh of relief when they are able to start serving meals again. However, it’s hardly likely to be business as normal. Strict conditions will need to be in place to ensure the safety of workers and patrons alike, including venues being required to record the contact details of all patrons, additional cleaning and staff health checks and temperature screening, on top of the requirement to strictly enforce the 1.5 metre social distancing requirements.

It is likely that many businesses will required to invest in new training for staff, in order to meet the emerging food services best practice expectations, like those recently published by the Restaurant and Catering Association.

These measures are likely to see a significant increase in costs associated with traditional food service, which will undoubtedly need to be passed on to consumers. In an environment where every day Australians, even those still employed, are cautiously watching their discretionary spending, this could well see a second wave of business impact as restaurants and cafes assess whether operating under these expensive new requirements, along with diminished custom, is financially viable or not.

Undoubtedly most Australians will welcome the opportunity to be able to visit their favourite restaurant, bistro or café and enjoy a meal prepared by someone else, whether it’s a long awaited date night or a family birthday celebration. However, it’ll be completely different experience for everyone involved. Time will tell whether there will be further pressures on the sector but in the meantime, it is a most welcome step back towards normality.

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