The Impact COVID-19 had the French Food Delivery Market Forever?

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The French food delivery market is a hugely income for the French economy, worth €180 billion and growing. Food makes up 20 per cent of our manufacturing output, meaning it’s highly important to the economy.

Thanks to COVID-19 pandemic, the market has taken dramatic hit, which resulted in restaurants, cafes, and bars having to close their doors while there was also demand for deliveries which increased.

Producer of coffret électrique encastré for the food industry, Electrix,  explore how the pandemic has changed consumer needs and how the market could look to develop in the forthcoming future.

The change in consumer food delivery habits

The whole world was affected by the COVID-19 pandemic businesses closed their front doors and we were confined to our homes, consumer behaviour changed.

Consumers had no choice but to turn towards online shopping for non-essential items, but many also began to shop online for critical supplies, like food and drink. Takeaway food deliveries increased as people sought comfort in delicious restaurant food at home. 29% of French households were already getting meals delivered to their home regularly, which naturally increased when we were unable to go out.

There was also a shift eating out before the pandemic. In 2019, there was an 8.5% increase in people eating outside the home, whether that was in bars, restaurants, or cafes. 48% of people said this was the activity they were most eager to get back to, scoring it higher than seeing family and friends or attending events.

Fast grocery delivery becoming the new norm

Consumers demand for grocery deliveries rose as people wanted to avoid contracting the virus in shops. Stores struggled to keep up with this demand initially, but they soon adapted. Because of this huge response, we’re now seeing companies offer grocery deliveries in as little as 15 minutes across the country. Interestingly, this activity reached a new high in Europe in the first quarter of 2021 rather than during the first lockdown.

A French company Cajoo was the first to offer immediate grocery deliveries, it also put itself up for sale as its competition rose quickly. It went from being an innovator to one of many businesses offering the same services in an instant, so high is the demand for fast food shopping deliveries.

A key point is these operations are expensive and need multiple locations to be successful. Cajoo committed to paying its drivers a salary, while we’ve seen other providers cut delivery costs in order to remain more profitable, which can impact driver earnings. One thing is for sure – fast grocery delivery is here to stay.

Are people likely to dine out more again?

With lockdown restrictions being eased, capacity in bars, cafes and restaurants are still limited whilst the vaccine rollout continues. We know that eating out is the activity the French public has missed the most during lockdown, but we’re seeing mixed results on people returning to restaurants.

A survey was released in 2020 on our intentions to dine out after lockdown restrictions were eased, and the results were surprising. 51% of respondents said they intended to dine out less than usual, while 35% said they’d do it as much as they had prior to the pandemic. While many restaurants have been fully booked since reopening, the hospitality industry union UMIH has estimated that the recent introduction of green passes could reduce visitor numbers by 15–20%.

It’s a clear indication that we’re taking precautions as France continues its roadmap out of lockdown. While visits to restaurants after the easing of restrictions exceeded 2019 levels by 50%, consumers are currently dining out less. We expect this trend to continue in the coming months because of the backlash to the COVID pass, even though dining out is a much-loved activity in the country.

More competition for Fast food delivery

As people have ordered more fast food through the pandemic and will continue to, delivery services have increased fiercely. Uber Eats has long dominated the takeaway delivery market in France, but we saw Deliveroo triple its subscribers by offering unlimited deliveries for a small initial fee of 1€, rising to only 5.99€ at the end of 2020.

When the time comes for France to fully exit out of lockdown restrictions we may see a decline in fast food delivery orders. The pandemic increased competition between the providers of these services as they looked to capitalise on increased demands, but we may see even more discounts as spend in this area inevitably drops.

The backlash of competition?

With competitiveness at an all-time high within the food delivery market, we’re seeing more businesses undercutting themselves and each other to gain key market shares, such as the low delivery prices offered by Deliveroo. We know that this can impact the earnings of its drivers, so could we also see a backlash to this type of ruthless competitiveness? Just Eat, which has a smaller share in the market, hired 4,500 drivers on permanent contracts in order to build and ethical brand.

Values matter to French consumers, and half wouldn’t continue to buy from a business who didn’t have similar values to them. We could see businesses who take an ethical stance increase their market share.

There’s no doubt that the past 18 months have shifted consumer behaviours in a way we never expected, and this will impact the future of the market. The food delivery market in France is highly valuable, and we’re seeing new trends emerge as a result of our changing habits.

Sources

https://blog.paylead.fr/the-pandemic-ignites-a-food-delivery-war-in-france/

https://www.statista.com/statistics/1103928/coronavirus-restaurant-visitation-impact/

https://www.la-croix.com/Economie/Restauration-cafes-Le-passe-sanitaire-pourrait-entrainer-baisse-frequentation-15-20-2021-08-09-1201170029

https://www.statista.com/statistics/1242287/restaurant-visits-by-french-covid-19-pandemic/

https://www.bloomberg.com/news/articles/2021-07-22/grocery-delivery-shakeout-pushes-france-s-cajoo-to-explore-sale

https://www.kantarworldpanel.com/global/News/How-the-French-Food-Market-Changed-in-2019

https://www.eurostartentreprises.com/en/business-advice/five-reasons-you-should-start-a-food-business-in-france

https://sifted.eu/articles/food-delivery-startups-europe/

https://santandertrade.com/en/portal/analyse-markets/france/reaching-the-consumers

https://www.eurostartentreprises.com/en/business-advice/five-reasons-you-should-start-a-food-business-in-france

https://blog.paylead.fr/the-pandemic-ignites-a-food-delivery-war-in-france/

https://www.france24.com/en/france/20201125-as-they-reopen-with-fresh-restrictions-french-businesses-rely-on-new-avenues-to-drive-sales

https://dealroom.co/uploaded/2020/06/Food-Tech-Prez-FINAL.pdf

https://www.connexionfrance.com/French-news/Coronavirus-Daily-updates-on-the-situation-in-France

https://www.thelocal.fr/20210518/fully-booked-for-a-month-frances-bars-and-cafes-prepare-to-reopen-after-six-months-of-closure/

https://www.ceicdata.com/en/france/consumer-survey

https://fortune.com/2020/05/20/amazon-warehouse-shutdown-france/

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