LONDON (Reuters) – Britain’s supermarket sector will be a beneficiary of new curbs on the opening hours of bars and restaurants to tackle a fast-spreading second wave of COVID-19, analysts said on Tuesday.
Prime Minister Boris Johnson ordered England’s hospitality venues to start closing at 10 pm from Thursday and restricted them to table service only, warning the measures could last six months.
But their loss of trade will be another boon to the country’s major supermarket groups, market leader Tesco
Britain’s initial lockdown in March temporarily transferred the eating out market – bars, cafes, restaurants, school meals and workplace canteens – to the home, shifting about 30% of the nation’s food consumption back to stores.
With the lockdown lifted in July that trade was gradually returning to the eating out market, helped by the government’s “Eat Out to Help Out” subsidy scheme.
But the new curbs will slow this normalisation process.
“It’s going to further reduce capacity to the food and beverage sector which is probably going to stick with the retail channel,” said Shore Capital analyst Clive Black.
The new curbs could also have a major effect on the key Christmas period, when traditionally a huge volume of food and drink is consumed outside of the home.
Analysts said that while supermarkets would get a festive fillip at the expense of the food and beverage channel, current restrictions on households mixing could dramatically impact the shape of trade.
Former Sainsbury’s boss Justin King, currently a non-executive director of Marks & Spencer
“Christmas will still happen, it will still be a sales peak for retail, food in particular, but I think it’s likely to be less pronounced around just one or two days as its historically, typically been,” he told BBC radio.
(Reporting by James Davey; editing by David Evans)
