Sales, Traffic Claw Back as Consumers Opt to Go Out
New data from across the restaurant industry is encouraging, but there is still a long way to go to get anywhere near normal.
Analytics firm The NPD Group reported that restaurant chain transactions for the week ending June 14 were down 12 percent year-over-year. Quick service fared the best, down only 11 percent compared to a year ago, and full-service chains were down 26 percent year-over-year. The latter saw a notable improvement, with sales returning by nearly 50 percent compared to the first days of the pandemic. The segment is tapping into pent up demand as it opens. Now, 74 percent of restaurants are in markets with at least some dine-in operations permitted.
Research firm Black Box Intelligence showed that May ended with a big improvement of 15 percent over the prior month. As restaurants reopened, the category overall was able to claw back 4.3 percent of food spending from grocery stores, which became the leading foodservice outlet for consumers during the pandemic.
Traffic analysis and surveying firm Sense360 saw traffic continued to come back to restaurants. As of June 13, traffic was down up nearly 60 percent from the trough of minus 75 percent year-over-year seen on April 12.
Wi-Fi service and marketing vendor Zenreach saw that through May, restaurant traffic improved by about 32 percent and bar traffic improved by 31 percent. But for every positive number there is still a deep gulf to get back to normal.
“The low point for restaurants was about 24 percent of traffic than you would normally see, that was a dramatic hit,” said Zenreach CEO John Kelly. “Since that time, we have seen a pretty nice comeback, but we’re just about 49 percent of historic averages, so that’s great, we’re seeing it come back but we still haven’t seen 50 of traffic return.”
Kelly has been watching as users return via Wi-Fi “pings” to customer cell phones when they enter the thousands of restaurants and retail outlets in which Zenreach operates. His data mirrors that of other research outlets—and there’s a long way to go.
He said beyond the big number, there is also dramatic market-by-market differences when it comes to traffic recovery.
“This is very locale and state dependent. If you look at Georgia, which I think had the shortest lockdown period of three weeks, they went down to about 27 percent of traffic but rebounded fairly quickly; now they’re up to about 68 percent. That’s considerably higher than the average,” said Kelly. “You compare that to New York and New Jersey, they're just under 40 percent still today, so that’s a dramatic difference in foot traffic. California is about 47 percent for restaurant-nightclub sector. Los Angeles and San Francisco are actually lower because they still have those phased restrictions, we [in San Francisco] are about 38 percent.”
And a final key learning in his data is another affirmation that consumers are not driven as much by state orders, but by their own ideas of safety.
“The first is the shelter-in-place orders. I think San Francisco was one of the first to put it in place on March 15 or 17 and about three days later California imposed it,” said Kelly. “We had already seen a decline in foot traffic two weeks before. So, by the time the orders were issued, foot traffic had dropped by 45 percent; people had already adjusted their behaviors.”
He said it was both people recognizing that mandates were coming and maybe they should go do a grocery run instead of dining out and behavior changes due to fear of catching COVID-19. He said it was also true when shelter-in-place orders lifted, traffic started rising as state leaders started planning reopening.
“We started to see traffic coming back three to four days before the orders,” said Kelly. “That’s consumer driven for sure.”
So far, the spike in COVID-19 cases in those early opening states have not slowed down traffic. According to The NPD Group, the uptick in cases in Arizona, California and Florida have not yet impacted the traffic rebound. NPD’s David Portalatin said barring a major change in lawmaker strategy in those states, consumers are eager to get back into restaurants, albeit slowly.
“The only major variable in play with a case surge at the moment would be erosion in consumer willingness to dine out,” said Portalatin. “Thus far, the evidence in restaurant transactional improvement confirms that dining rooms are opening, and there is consumer demand to fill opened restaurants.”