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March 23, 2020

Coronavirus – J&J Snack Foods issues new warning on sales

J&J Snack Foods has warned the impact on its sales from coronavirus could be twice as severe as earlier estimated.

By Dean Best

J&J Snack Foods has warned the impact on its sales from coronavirus could be twice as severe as earlier estimated as more and more foodservice outlets in the US close temporarily to curb its spread.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

Around 10 days ago, the New Jersey-based snacks maker said it expected a “material” impact on its business from Covid-19. At the time, the Hill & Valley and Minute Maid brand owner said it could not exactly quantify the impact on sales but indicated an estimate of around US$350m to $400m.

However, Nasdaq-listed J&J Snack Foods is now warning two-thirds of its sales to restaurants, schools, stadiums and arenas, movie theatres and amusement parks could be affected based on annual revenues of $1.2bn, compared to a previous estimate of one third, as more venues close their doors.

“The virtual shutdown of large segments of the US economy resulting from the efforts to limit the spread of the coronavirus (Covid-19) is having a material impact on its sales and operations and that it expects its results of operations to be materially negatively impacted,” the company said in a statement dated yesterday (22 March).

It continued: “Although the balance of its business may improve due to increased sales to grocery stores and other retailers, it expects the overall impact to be decidedly negative,” particularly as the country’s Centers for Disease Control and Prevention (CDC) revised its guidelines.

President and chief executive Gerald Shreiber said: “As CDC guidelines issued over the past week along with restrictions imposed by government authorities have served to decrease peoples’ interactions hoping to reduce the spread of the virus, the impact on our business has increased . 

“We have, and are, continuing to develop contingency plans to address and lessen the impact of the effects of coronavirus on our employees, our customers and our overall business. Our overriding hope, though, is that the efforts to contain the virus are successful both in this country and throughout the world.” 

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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