Overview of Covid-19 impacts from July to September 2020

A summary of how Covid-19 has impacted the seafood industry in the UK from July to September 2020.

July and August: Restrictions ease and hospitality reopens

In the summer months, restrictions continued to ease in the UK, on the continent and further afield. In the first half of July, following the reopening of restaurants in Europe, UK foodservice markets gradually reopened. This allowed consumers to visit pubs and restaurants for the first time since many closed in March.

Pubs and restaurants first reopened for outdoor dining only, followed by indoor dining as the summer progressed. The wider UK hospitality industry also reopened in July in time for school holidays. While some holidaymakers made use of “travel corridors” established with Europe, many more stayed home or went away for staycations with coastal areas of the UK proving particularly popular.

Consumers shifted back to eating more meals out of home. Retail and direct sales declined from the highs of earlier in the year but remained relatively strong. In August, the foodservice sector and its suppliers saw an even greater boost with the launch of the UK-wide Eat Out to Help Out scheme. This helped processors and wholesalers sell stock - which had built up during lockdown - into foodservice, increasing demand for raw material once more.

The catching sector began to see better prices for some species as domestic and European foodservice markets returned and key export markets re-opened, however shellfish prices remained low. Some shellfish aquaculture businesses, with product largely destined for export and high-end foodservice, also continued to struggle with markets and price during this period.

Processing businesses that closed or reduced production during the height of lockdown continued to come back on-line throughout the summer. Some of the large shellfish processors were the last to restart operations by early August.

Late summer: Cases rise and restrictions increase

In August, Covid-19 cases began to rise again and restrictions increased, first on the continent and soon after in the UK. In September restrictions gathered pace across the UK.

Restrictions differed by home nation. They included variations on a “rule of six” limiting gatherings with different households, and a 10pm curfew for pubs and restaurants in England, Scotland and Wales. Towards the end of this period the operating environment became increasingly unstable for businesses as the threat of a ‘second wave’ and further restrictions picked up. Uncertainty around future trade arrangements with the EU added additional pressure. 

With the increased restrictions set to combat the second wave of the virus, many consumers too lost confidence in dining out of home. They turned back to ‘in-home’ spending by the end of September. Financial uncertainty and concerns around future job security led many to reassess their spending priorities. This further impacted on their willingness to spend on eating out and other things considered luxuries.

Illustration of impacts for July to September

The following diagram provides a high-level overview of the direction and magnitude of Covid-19 impacts on different parts of the UK seafood supply chain from July-September 2020.

Restrictions ease then return

Shocks: Foodservice demand increased as lockdown restrictions continued to ease around the world and schools broke up for the summer. Despite this shift in demand, retail and direct sales remained strong. Travel corridors to Europe opened up and exports destined for foodservice on the continent improved in the height of summer. Uncertainty increased towards the end of August and into September as restrictions returned in the UK and in key European seafood export nations.

Diagram showing Covid-19 impacts on supply chain from July to September, compared to same period in 2019 (as detailed below)

Supply

  • Landings – mild negative effect
  • Aquaculture – mild negative effect
  • Imports – similar

Production and Distribution

  • Fish auctions – similar
  • Logistics and Transport – similar
  • Processing and Distribution – mild negative effect

Markets

  • Foodservice – mild positive effect
  • Retail – strong positive effect
  • Exports – mild negative effect
  • Direct sales – strong positive effect

UK Government Response

Seafood businesses utilised the initial raft of Covid-19 government support measures to varying degrees from April to September. 81% of seafood processors reported using at least one government support measure.

The Job Retention Scheme (the ‘furlough scheme’) was the scheme with the greatest uptake, with 62% of processors reporting using it.

Further government support measures were announced throughout the summer to address continued concerns around employment and business finances. Generally these were not specific to parts of the seafood sector as some earlier packages had been. The Eat Out to Help Out scheme was targeted to support the hospitality, foodservice and tourism sectors but had knock-on effects elsewhere in the seafood supply chain.

Read more about Covid-19 impacts from July to September

Individual business impacts within each area of the supply chain are explained in more detail in the following webpages:

Contacts

For further information on our review of Covid-19 impacts on the seafood industry contact:

Ana Witteveen
Economist
t:
0131 524 8659
m:
07815 428 554