Coronavirus: HoReCa market hit hard

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On 14 March 2020, an epidemic threat state was introduced in Poland and a number of restrictions were announced to stop the spread of coronavirus (SARS-CoV2, Covid-19) in the country. Overnight, the HoReCa industry found itself in a completely different reality – the activity of restaurants was limited only to providing delivery and take-away services. On 24 March the restrictions were extended to 11 April 2020.

Restaurants closed to guests

On 14 March 2020, an epidemic threat state was introduced in Poland and a number of restrictions were announced, including the reintroduction of border controls, a ban on foreigners’ entry into Poland (with exceptions), and the suspension of international flights and railway connections.

The activity of restaurants, pubs, bars and other catering establishments was limited only to the possibility of delivering food and take-away services.

Future of HoReCa depends on how long restrictions last

Before the coronavirus epidemic reached Poland, PMR predicted a 5% annual growth of the HoReCa market in 2020 (under the assumption of no epidemic in Poland). At the beginning of the year, when the coronavirus in Poland was only a little known disease from Asia, the mood of the representatives of the HoReCa industry was at its worst since 2015. At that time, inflation of food product prices was a threatening factor of increasing importance.

Unfortunately, the coronavirus reached Poland. The government undertook a number of actions aimed at limiting the development of the number of the disease, including, among others, limiting the operation of catering establishments only to the activity of transporting and serving take-away dishes. Overnight, restaurants, cafés, pubs and other places lost the possibility to receive guests in the premises – at first for two weeks.

The fact that the introduced restrictions will have a negative impact on the HoReCa market is not subject to discussion. However, it is not decided how long they will last, and the future of the HoReCa market depends to a large extent on that now. As the situation is developing dynamically and it is extremely difficult to predict its further development, PMR has considered three scenarios. In the first one – restrictions for two weeks – we forecasted a significant reduction in the growth rate of the market’s value in the whole of 2020 compared to the base scenario, in which we artificially assumed no epidemic in Poland.

On 24 March, it turned out that the two-week restrictions were extended to 11 April, i.e. for one month. When preparing forecasts for the market, we took into account the scenario of two months’ closure of restaurants. We also considered a third, even more pessimistic scenario: extending the restrictions to two months and returning the disease in the autumn. Our analysis shows that the extension of the restrictions to two months will bring a reduction in the value of the HoReCa market in 2020 compared to the previous year. This concerns all market segments – hotel catering, catering and restaurant market. It will be similar in the third scenario, but in this case the falls will be even stronger, and the situation may change irreversibly due to the disappearance of some players.

Cafes and alcohol bars suffer most

The only permitted form of restaurant activity was to offer take-away and delivery dishes. However, this does not in any way save cafés or alcohol bars that do not operate in these sales channels. Moreover, for some restaurants, delivery has so far been rather an additional source of income and it will be difficult for such restaurants to make a living just from offering take-away or delivery. In addition, the offer of some restaurants, e.g. premium restaurants, is not suitable for delivery. Pizzerias are in a much better situation – in this segment, most of the restaurants have been operating on delivery for years and Poles are used to ordering this type of dishes. The offer of fast food bars can also be easily delivered or taken away.

Justyna Zagórska
Senior Analyst

Tel. +48 12 34 05 135

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