Horeca and out-of-home consumption threatened by retailers in Spain
After the pandemic challenges faced by the 300,000 horeca outlets of Spain a new significant threat overcasts the out-of-home consumption industry. Four out of ten of out-of-home consumption occasions in Spain are no longer taking place in a food service establishment, bar or restaurant outlet. According to a newly issued Kantar survey, those occasions are taking place in the modern retail trade channel which was normally the one used to shop only for in-home consumption.
Carrefour, El Corte Ingles or Mercadona supermarkets are the new competitors of the Spain’s 300,000 bars and cafeterias with their new “ready-to-eat” offerings booming in the last 4 years, representing already 3% of the total retail chains’ turnover.
We have just learned (through Alimarket magazine in May 23) that Mercadona (the leader in retail with a 26% market share) already has 1,000 stores servicing ready cooked and ready to eat food. This business unit has achieved more than 1% of total Mercadona turnover at €323m in 2022.
The ready-to-eat offer in supermarkets is increasing at a rate of 10% at the expense of decreasing sales mostly in the big fast-food chains, according again to the same Kantar survey.
The paradox in this new pattern of consumption is the counterbalance in terms of sales switching from other out-of-home outlets which are not significantly being hurt by this trend, due to the appearance of home delivery operators (Glovo, Uber Eats, Just Eat, Deliveroo, etc.) who are dynamising the sector and have already reached a penetration of 3 million Spanish households in a short space of time.
Quoting a survey recently conducted by Deloitte and other sources, the food-to-home delivery business could double in the next four years in Spain, helping the traditional food service outlets and restaurants to compensate for the decline in out-of-home consumption occasions produced by new social trends such as stricter drink drive enforcement, cable tv offers, increased average meal prices, etc.
This transfer of locations and consumption occasions from one channel to the other and vice versa brings enormous challenges and has to clearly be tackled in order to benefit from all the opportunities arising.