Chains with existing off-premise platforms fare better amid coronavirus fallout
Further signs of sales erosion among restaurants came in the NPD Group Inc. report for the week ended March 29, which found customer transactions fell 42% across all segments as the coronavirus pandemic continued.
“While steep transaction declines are being seen industrywide, some restaurant models are better suited than others to retain existing off-premise business, like drive-thru, carry-out and delivery,” said the Chicago-based analytics company.
NPD’s CREST Performance Alerts found the percentage change from a year ago was down 40% for quick-service chains and down 79% for full-service brands. The CREST index measures transactions for 70 quick-service, fast-casual, midscale and casual-dining chains.
“The transaction declines partially reflect the struggle of on-premise restaurants to pivot to off-premise models,” said David Portalatin, NPD’s food industry adviser and author of “Eating Patterns in America,” in a statement.
“Many restaurants that are attempting to make the move are doing so with limited menu offerings and without the benefit of drive-thru lanes,” Portalatin said. “Anecdotally, some operators are giving up the cause and closing altogether.”
Dallas-based Black Box Intelligence, another analytics and data company, last week released data that indicated full-service restaurants in all states suffered sales declines of 60% as of April 1.
“Most full-service restaurants were able to increase off-premise sales but the offset of lost dine-in sales is low,” Black Box Financial Intelligence reported, noting that the midafternoon sales daypart “is holding up the best; late night is the worst.”
Among demographics, Black Box’ consumer intelligence division found Gen-Z consumers were spending 22% less year over year in restaurants and Baby Boomers aged 65 and older were spending 43% less comparatively in the same period.
The NPD Group’s restaurant census, or ReCount, found about 97% of U.S. restaurants are now under some level of restrictions at the state and city levels to stem the spread of the coronavirus.
Before the COVID-19 outbreak, NPD noted, “on-premise dining represented 52% of restaurant industry dollars, and off-premise, like carry-out, drive-thru and delivery, represented 48% of dollars.”
Carry-out represented the largest dollar share at 53% of off-premise modes and drive-thru represented 38%, NPD said. Delivery provided 9% of off-premise sales.
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