Impact Report April 17, 2020

The current COVID-19 pandemic has quickly and dramatically redefined the food and beverage industry landscape.

One of the most common questions we are receiving is “how is the industry responding and what are they doing to adjust” either at the overall or local level.  Although responses are changing by the day (if not by the hour), we have collected the following information for your consideration as of Friday, April 17th:


The negative traffic trends in the US, Europe and Asia have stabilized.

For the US: Overall, QSR negative YOY trends leveled out at around -30 to -45%. The Northeast continues to be the hardest hit, with the South faring the best. Consumer insights firm, Sense360, is reporting similar traffic trends for food retailers. Table service declines also leveled, at averages of -70 to -80%, with an ever-so-slight positive upward trend of 2-3%.

We’ve also observed the following micro-trends in the US:

  • “To Go” meals from table service establishments have been trending upward week to week since March 15; with YOY traffic increasing 15-35% and YOY sales up between 50-65%. Delivery traffic trends are increasing at similar rates.
  • QSR Drive-Thru traffic holds stable at around -5 to -30% but with a slight positive YOY increase in sales each week.

For Europe: With strict social distancing guidelines still in place in many countries, overall traffic declines hit the low point last week. But there is a glimpse of hope. Some brands in Italy and Spain restarted takeout and delivery services in areas with lower infections and early trends indicate traffic numbers are starting to be less negative.

For Asia: The decline in YOY overall traffic is leveling out between -15% to -25%. In some countries, operators have only seen slight traffic decreases YOY, as countries such as South Korea and Taiwan DO NOT ban restaurants from offering dine-in services and because more restaurants had established in-house delivery operations and could avoid expensive commissions to third parties. However, we are starting to see the negative shift in sales / traffic due to policy changes on dine-in.


Recovery will depend on customer’s feeling of well-being – but they trust the industry

Insights shared by industry publications are increasingly pointing to a slower consumer return to market without multiple assurance of safety from the virus. While the removal of Stay at Home Orders will be helpful in getting consumers back into their normal routines, guests will still be wary of normal activities without assurances of protection and well-being from restaurants and other institutions.

In our recent global consumer survey, an average of 75% of respondents trust restaurants to safely produce and deliver them food.

We also asked consumers about their food-related concerns and how they choose a restaurant for delivery/take out. All respondents listed Employee Hygiene, Reputation and Level of Contact as top-of-mind factors when considering restaurants to eat at/order from in the coming months. For a visual representation of this week’s insights click here.

We polled consumers in the US, Singapore, South Korea, the U.K. and Taiwan, and generated approximately 1,800 responses. We will continue to roll out results from the survey, including differences between countries, generations, gender and heavy vs. light users, on this web page.

Key Economic indicators

Every month Consensus Economics surveys over 250 prominent financial and economic forecasters for their estimates on a range of variables including future growth, inflation, interest rates and exchange rates for more than 20 countries.

Below we’ve outlined average results from their April 6 survey. According to RMS Chief Research Officer, Sebastian Fernandez: “It will be crucial to see how the CPI forecasts evolve once we start coming out of this situation. The liquidity injections governments are putting in place to battle the economic decline may have an impact driving inflation higher in the future. We are closely monitoring a wide range of factors in order to advise our clients on how best to navigate these challenging circumstances.”

Pricing Activity

Pricing Freezes and Innovation

Now is not the time for change. Consumers are reeling, understandably, from such a dramatic shift from normal life. They are much more aware of spending and highly primed to notice changes to price or menu. Because of this, tolerance is low for noticeable price increases during the crisis and for pricing immediately upon reopening (likely to occur first in Asia and/or Europe). This is also applied to major menu changes (additions/deletion) that seem to be caused by anything other than supply chain issues or necessary simplification.

Could restaurants ‘steal’ back some market share from the retailers they lost to during social distancing in place?

In high-volume categories (think long shelf life items and paper goods), grocery retailers are changing their product mix to include less variety and more volume. As a result, discount-savvy consumers might be ‘forced’ to buy more expensive substitutes for the products they are seeking, stretching their weekly budgets. It will be interesting to see in the weeks to come whether that will translate into a positive momentum for restaurant brands, as they continue to offer ‘deals,’ and easing the impact on consumers’ budgets.

Industry Strategy

Longer Marketing Windows & Simplified Messages

With “Limited Menus” and “Leaner Restaurants” becoming the standard, brands are reevaluating their communication strategy for the remainder of 2020. They are abandoning the traditional LTO marketing strategies defined by shorter communication windows and several messages, and instead shifting to a more streamlined approach with longer windows and only one message. This approach reduces the complexity in new item introductions while also allowing for gains in speed of service and cost reductions from printing new menus.

Meal Kits & Heat-and-eat/Take-and-bake Dishes

Restaurants continue to find ways to diversify revenue streams by offering as many income channels as possible. This includes the introductions of Meal Kits and other DIY-style options to help attract guests looking to diversify home options and complement their groceries. Brands such as Newk’s and Shake Shack are offering both groceries and DIY meal kits, while other independents and chains are offering frozen prepared entrees, such as meat pies or pierogis, for customers to simply heat up at home.


Menu Strategy

We have seen a trend in guest purchases shifting away from what might be considered “healthier alternatives” to higher calorie, indulgent sections of the menu, leading to a decline in some categories that previously trended upwards, such as Salad Selections/Lighter Fare.

Interestingly, this is contrary to results from our consumer survey (noted above). When asked about their top three food-related concerns during the pandemic, participants stated fresh/ healthy food and nutrition as most important (safety and hygiene was third).

Is the dichotomy just an example of the all-too-common difference between what we say and what we do? It might be. But it could also be an opportunity. Brands can start to understand the reasons for the high calorie choices, in the current environment. For example, consumers might be ordering out only for special occasions (particularly families) or since they are ordering less frequently, they want to indulge in order to get the most for the experience/their money. Then, as we start to open again, brands can cater marketing messages to respond to consumers’ concerns about health and hygiene.

Remember, the communications and actions of restaurants to date resulted in an overwhelming trust in our industry.

Let’s start your recovery strategy

Now, more than ever, RMS is committed to doing all we can to support the restaurant industry. Our team of experts is ready to help put you on a path toward profitability.