Quick service restaurant chains have discovered how to expand an already-high capacity for off-premises volumes which could possibly carry restaurants through this new wave of restrictions.
Restaurants’ progress of one step forward likely will go two steps back as shutdowns of in-person dining are mandated in cities such as Philadelphia, New York and Los Angeles. However, one lesson could possibly carry restaurants through this new wave of restrictions.
Specifically, quick service restaurant chains discovered how to expand an already-high capacity for off-premises volumes. This is evident when analyzing customer transaction declines at major restaurant chains.
These declines improved from November to October to -8% compared to a year ago, a 1-point gain from October’s -9% decline, according to The NPD Group. Moreover, transaction declines at quick service restaurant chains were down -7% in November versus year ago, according to NPD’s CREST Performance Alerts.
This improvement was aided by quick service’s proficiency in offering services such as carry-out, drive-thru and delivery, says David Portalatin, NPD food industry advisor.
“Major quick service restaurant chains have learned to expand their already-high capacity for off-premises volumes,” he says. “We should continue to expect drive-thru and delivery to be performance drivers for the best performing restaurant operators as consumers continue to shift meal occasions to the home.”
This expansion resulted in off-premises visits increasing by 21% in October compared to year ago. Total restaurant carry-out, which holds the largest traffic share of off-premises services at 46%, increased by 6%; drive-thru, which represents 43% share of traffic, grew by 24%; and delivery, which represents 11% share, had a gain of 125% in October from a year ago, according to NPD’s foodservice market research.
Unfortunately, these off-premises gains come at the expense of full-service restaurants which are predominantly dine-in operations. This was evident in October when dine-in restaurant traffic for the total industry, chains and independents declined by 53% from a year ago.
Although full-service chains have pivoted to offer added off-premises services, customer transaction declines remain in the double digits. In November, full-service transactions were down 23%. These declines deepened in the latter half of the month as heightened COVID cases resulted in reduced restaurant capacity and dine-in restrictions across the country.
Source: “Quick Service Dining Chains Expand Off-Premises Activity”