What's next for the food equipment supplier market?

By The Foodservice Equipment Association (FEA)

FEA has undertaken new research into the state of the foodservice equipment market. While the government relaxations of lockdown are welcome, expectations are low. All respondents reported that current sales were less than 50% of pe-Covid figures, with two thirds saying they were down to 30% or less.  Most equipment suppliers don’t expect things to improve much in the next six months – over half expect their sales to be no more than 50% of pre-Covid levels by December 2020. 

However, the prospects lift considerably after 12 months, with most suppliers predicting sales levels getting to 70% or beyond. And by December 2021 over a third except to be back at 100% of pre-Covid figures. 

The research, conducted in June 2020, enlisted members of FEA and included UK manufacturers, distributors of imported equipment, dealers and service companies. 

In terms of the impact on the workforce, the news is ugly. All respondents had furloughed some staff, and nearly 40% had furloughed over 80% of their employees. Nearly 40% also expected to make redundancies.  Overall people expect there to be a reduction in the sizes of equipment suppliers’ sales and support teams and a focus on ‘digital transactions.’ 

The research covers the thorny issue of payments. Over 60% of companies are experiencing problems collecting payments from customers. Adding salt to the wound is the fact that government support is clearly not working for everyone. Just over 30% of respondents had applied for business grants, but worryingly over 60% of these had been turned down. Perhaps not surprisingly, companies reported more success with business support loans: of the 36% who had applied for a loan, 53% were successful. 

Meanwhile Covid-related insurance claims are predictably fruitless: over 95% of those making a claim were turned down. 

In terms of the immediate future, most respondents expect to see an increase in second hand equipment on the market, which will obviously dent new equipment sales. Credit is likely to be tight, which again will push down demand for new equipment. 

One area that looks likely to gain is innovation – most companies expect to see foodservice operators demanding new technologies to answer the ‘new normal’ needs, and manufacturers developing them in response.