Full service restaurant chains see most improvement in transaction declines as more dining rooms open

Chicago, June 15, 2020 — U.S. major restaurant chain transactions were down  -14% in the week ending June 7 versus the same week a year ago, a +29 point gain from the steepest decline during the COVID-19 pandemic of  -43% in week ending April 12, reports The
NPD Group.  Sixty-nine percent of restaurant units are now in geographies that permit some level of on-premise dining and the number should increase to 74% in week ending June 14*.

Major full service restaurant (FSRs) chains are still seeing the most improvement of restaurant segments as more dining rooms open and those already open increase capacity.  The FSR segment improved +7% in the week ending June 7 over last week and has improved +49 points since the industry hit bottom the week ending April 12. Even with the positive momentum, the FSR segment is still down -30% versus year ago, according to CREST®
Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 72 quick service, fast casual, midscale, and casual dining chains.    

Quick service restaurant (QSR) chains have fared better than FSRs throughout the pandemic and continue to do so. Major QSR chains were able to pivot operations to off-premise fast after the dine-in restrictions went into effect across the country since many have drive-thru windows and are set up to handle a high volume of takeout orders. QSR customer transactions were down  -13% in the week ending June 7 versus year ago.  Given the lesser dependence on dining room traffic than FSRs, QSR improvement week-over-week was only +4%.

“The value of incremental on-premise sales isn’t as important to quick service restaurants,” says David Portalatin, NPD food
industry advisor and author of Eating Patterns in America. “In fact, some have resisted reopening dining rooms preferring to forego the incremental cost of doing so and continue to optimize off-premise sales.” 

In terms of dayparts, lunch has historically been the strongest restaurant daypart, followed by dinner.  Breakfast is still the daypart most likely to be prepared and eaten at home, but expanded restaurant offerings in recent years have started to move more morning meals from homes to QSR drive-thru windows. When stay-at-home orders became widespread, breakfast was the restaurant meal most easily converted back to the home. Throughout NPD’s tracking of the impact of COVID-19 on the restaurant industry, the morning meal, which represents a breakfast or morning snack occasion, has suffered the steepest transaction declines.  Morning meal customer transactions at major restaurant chains fell by  -18% in the week ending June 7 compared to same week year ago. Lunch transactions declined by  -11% in the week compared to same week year ago and customer transactions were down  -12% at dinner, reports NPD.

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