NPD: Spikes in COVID-19 cases not yet impacting restaurant recovery
Transactions at major restaurant chains in states that have reopened dine-in service continue to improve despite spikes in COVID-19 cases.
The NPD Group reported that Arizona, California, and Florida — three states that reported an uptick in COVID-19 cases — showed several points of improvement in restaurant chain customer transaction declines at full-service eateries (the restaurant segment most affected by dine-in closures) in week ending June 14 compared to the previous week, 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.
For the week ending June 14 total major restaurant chain transactions are down 12% versus the same week a year ago, which is down 1% below the previous week but the ninth consecutive improvement year-over-year, reported NPD. Quick-service restaurants still managed to improve slightly to -11% versus year-ago compared to -13% the previous week. As dining rooms reopen, full-service restaurant chains continue to have the strongest improvement in customer transaction declines, having a week-over-week gain of 12% in week ending June 14, moving up six points on a year-over-year basis to -26% versus year ago.
“The only major variable in play with a case surge at the moment would be erosion in consumer willingness to dine out,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “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.”
Restaurant trends for the week ending June 14 were aided by the fact that 74% of restaurant units are in geographies where some level of on-premise dining is now permitted. Next week, week ending June 21, 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. Keeping in mind the numbers reflect the percentage of restaurant units that can open and not the number of actual units that will open.