Over half of top Irish Food SMEs expect sales to decline in 2020: LIF
44% of Love Irish Food’s SME members anticipate less staff post pandemic, yet 62% believe 2021 outlook is more positive than 2020
17 September 2020 | 0
More than half of top Irish food and drink SMEs anticipate a decline in sale revenues this year due to ongoing Covid-19 impacts on their businesses, according to research undertaken in Q2 and early Q3 this year and conducted by Love Irish Food.
The not-for-profit organisation, established in 2009 to help safeguard the future of Irish food and drink brands, found that a third of its SME member brands expect sales to fall (by more than 15%) in 2020, while 54% believe their sales value will be down overall, driven mainly by decline in foodservice. On the other hand, 41% expect sales revenues to be up year on year with 5% showing no change.
Almost half (44%) of the association’s SME members said the decline in sales will result in their businesses employing less staff as the industry emerges from the pandemic, with just 10% expecting to increase employee numbers post Covid-19 and 46% retaining the same level of staff.
Separately, over half (51%) of Love Irish Food’s SME membership are experiencing greater short-term cash requirements than in 2019, an ongoing challenge for many who are struggling with narrow margins and cost competitiveness.
Despite the challenges curtailing growth prospects for many food and drink SMEs, 62% of Love Irish Food members believe 2021 will be a better year for their businesses than 2020.
Meanwhile, a significant cohort (46%) of respondents said they have experienced enhanced retailer support throughout the pandemic.
“The global health pandemic brought about by the spread of Covid-19 has been an unprecedented challenge for our industry and the scale of the issues we face continue to evolve at a significant pace,” said Kieran Rumley, executive director, Love Irish Food.
“Irish branded food suppliers have worked hard to maintain continuity of supply to the retail trade and will continue to do so as it faces into the prospect of a hard and complex Brexit,” Rumley added. “Maintaining food brands on shelf during this period will be a key challenge to the industry.”
Noting that Irish food brands have been increasingly supported by shoppers in recent months, Rumley called on Irish shoppers to continue this support for locally produced brands at a “vital point in our economic history”.
*(Survey conducted in July and August 2020 amongst participating Love Irish Food SME member brands)