Operations

Spike in COVID-19 cases not hindering drops in restaurant transaction declines

June 22, 2020

The spikes in COVID-19 cases in states that have reopened restaurant dine-in services haven't yet impacted the continuing improvement in major restaurant chain transaction declines as more states reopen, according to The NPD Group. Arizona, California and Florida — three states that reported an uptick in COVID-19 cases — still showed several points of improvement in restaurant chain customer transaction declines at full-service restaurants — the restaurant segment most affected by dine-in closures — in week ending June 14 compared to the previous week, according to CREST Performance Alerts. It provides a rapid weekly view of chain-specific transactions and share trends for 72 quick service, fast casual, midscale and casual dining chains.

"The only major variable in play with a case surge at the moment would be erosion in consumer willingness to dine out," David Portalatin, NPD food industry adviser and author of Eating Patterns in America, said in the release. "There are three main variables that will influence continued restaurant recovery: reopening of on-premise dining and expanding allowed capacity; the willingness of consumers to dine out and feel safe and confident in doing so; and the economic well-being of the consumer. Thus far, the evidence in restaurant transactional improvement confirms that dining rooms are opening, and there is consumer demand to fill opened restaurants."

For the week ending June 14, total major restaurant chain transactions were down -12% versus the same week a year ago, which is -1% below the previous week but the ninth consecutive improvement year-over-year. Quick service restaurants still managed to improve slightly to -11% versus a year ago compared to -13% the previous week. As dining rooms reopen, full-service restaurant chains continued to have the strongest improvement in customer transaction declines, having a week-over-week gain of 12% in the week ending June 14, moving up +6 points on a year-over-year basis to -26% versus a year ago.

Restaurant trends for the week ending June 14 were aided by the fact that 74% of restaurant units were in geographies where some level of on-premise dining was permitted. Next week, that number should rise to 77%, and based on state and local reopening plans at present, 85% of restaurants will be permitted to reopen dine-in services by mid-July, according to NPD.