The Impact of Covid-19 on Cafés and Coffee Shops

Market research company Allegra have more than 20 years' experience analysing the global coffee market and are the producers of the Project Café reports, widely recognised as the bible of the coffee industry.  In response to the coronavirus pandemic they have published research on the impact of the virus and lockdown restrictions on the coffee industry, below we summarise the main findings of the report.

8 Out Of 10 Owners Are Worried About Future Business Viability

As the lockdown is eased and the hospitality industry starts to come out of hibernation, there is perhaps more uncertainty about the future than at the beginning of the lockdown.  Café and coffee shop owners are wondering what the new normal is, when can people meet again in private and public spaces?  How long will the furlough scheme last?  The answers will have a significant impact on how coffee shops operate.  Owners’ immediate concerns are about cash flow and future business viability.

Owners Predict Financial Impact Of Covid-19 To Be Higher Than £50,000

The Allegra report was written seven weeks into lockdown, showing just how quickly cafes and coffee shops can be affected financially.  45% of owners said the coronavirus has impacted their revenue by over £50,000, while 30% estimated it to be between £20,000 - £49,999.  At the moment these figures are estimations, as the true impact of the pandemic is yet to be realised.

Majority Are Satisfied With The Government’s Response and Are Using The Furlough Scheme

Over the next months there will be reviews of the Government’s response and what worked and what didn’t, and comparisons will be made with the response from other Governments in Europe.  According to Allegra’s report, the majority of owners are happy with the response so far, in relation to the public health response and the business response.  The Government’s furlough scheme has been widely welcomed, with 93% having taken advantage of the scheme.  For some there have even been opportunities for growth using the Government’s favourable loans.

Business Operations Won’t Return To Normal For At Least 10-24 Months

We are coming to realise that, even when the lockdown is lifted, many restrictions will need to stay in place and consumer behaviour will be very different.  The most significant change will be the need for social distancing.  There is confusion and uncertainty amongst owners about how they will operate safely under such conditions and how they will return to previous levels of revenue.  It’s widely understood that until a vaccine is found there will be a change in consumer behaviour, with a reduction in tourism, business trade and disposable income.

To read the full report follow the link below: