Impact Report April 24, 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 24th:


We are starting to see some small signs of recovery, as negative traffic trends across the globe are slightly less negative than prior weeks.

For the US: Overall traffic and sales have seen encouraging developments over the past week. Traffic is trending at roughly – 20% YOY compared to an average of – 40% YOY in previous weeks.  Both QSR and Table Service restaurants are performing at less negative rates, though QSR traffic is still outperforming Table Service restaurants, with decreases of 20-30% versus 50-70% for the later.

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

  • In general, brands that predominantly offer chicken products are outperforming the competition. Last week’s YOY traffic numbers were still down 10 to 15% but, with consumers feeding bigger families or purchasing to use for a few meals, YOY sales were even and even up by 5% in some cases.
  • “To Go” meals from Table Service establishments continue to trend upwards; with YOY to-go traffic increasing 25-35% and YOY to-go sales up between 60-70%. Delivery traffic trends are increasing at similar rates.
  • QSR Drive-Thru traffic is slowly shifting into positive territory at 0-5% and sales are increasing week over week.

For Europe: Major brands as well as independent players in France, UK, Italy and Spain have started to reopen for takeout, drive thru and delivery services in areas with lower infections. Early trends indicate slightly less negative traffic trends. This week, on average, traffic was down -40% compared to previous weeks’ figures of -50% YOY.

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 still offer dine-in services and benefit from established in-house delivery operations.

However, we are starting to see an acceleration of negative shifts in YOY traffic (and YOY sales) in Malaysia and Singapore due to both countries extending strict measures until 28th April in Malaysia and until 1st June in Singapore in response to recent rise of new case numbers.


New Baselines

We believe that the slight recovery in traffic/sales trends is, in part, due to the length of time (some approaching a month or more) that most regions have been under Stay at Home enforcements. Customers are creating new “normal” behaviors as they adjust to new technologies, such as delivery apps, and minimal contact, and establish a new “status quo.” The most recent data we have seen may be considered the new “baseline” as time under quarantine becomes more routine and less aberration.

Bar-centric Businesses

Even with potential regional re-openings, late-night and bar-related businesses remain in a group highlighted for longer closure. This will continue to pressure this segment and may lead to permanent closures. On a positive note, it may provide windows for increased alcohol sales in other segments to fill the void.

Initial Learnings from Regional Reopenings

We are carefully watching consumer reaction in the European countries and about half dozen US states, mostly in the South, that are loosening stay-at-home guidelines and allowing an array of non-essential businesses to reopen. Will we see an immediate rebound in traffic or will customers still be reluctant to visit restaurants for a while? Are certain type of restaurants going to see a higher positive impact? If we see a rebound will it be short term? Or a consistent recovery?

In their recent survey, Sense360 shared that 67% percent of respondents said that they would be cautious when returning to dining out once COVID eases. Our own consumer survey found that customer concerns have, understandably, changed drastically during the pandemic, as have their reasons for choosing a restaurant.

 For example, US frequent users stated that visible employee hygiene practices is one of the main considerations in restaurant choice. Restaurants can meet the customers where they are by thinking about advanced protective equipment for their staff, deep cleaning schedules and even how to manage traffic coming in the door as customers might no longer feel safe waiting in a reception area alongside other guests. In Asian countries that are allowing dine-in, parties over 3 guests are either restricted or spread out in different tables throughout the restaurants.

Joel Davis, RMS Chief Strategy Officer, says the best strategy for brands is not to assume customers will act in any certain way, but rather to be able to react quickly to the shifting landscape. He advised restaurants to pursue constant testing and to analyze early results to identify the new normal and trends as they emerge.

Pricing Activity

Stimulus Checks Suggest Pricing Opportunity? Now is not the time.

With the recent influx of federal relief payments in the US, we saw a peak in questions about pricing and whether this is a good time to increase. Our advice continues to be: Now is not the time for change. Tolerance is low for noticeable price increases during the crisis and for pricing immediately upon reopening, as recently observed in China.

Consumers are still reeling, understandably, from such a dramatic shift from normal life. Moreover, they are more accustomed to purchasing from grocery stores and in some countries buying direct from wholesalers. This, combined with overall economic unease, means they are highly primed to notice changes to price or menu.

Minimum Wage Increases and Menu Planning

There have been calls to potentially delay the implementation of minimum wage increases in certain US regions until recovery can fully take hold in Food and Beverage sectors. Concern over increased business expenses and the methods available to combat them continue to be top of mind as most units will still be in a recovery phase through the remainder of 2020 and beyond.

Industry Strategy

Supply Pressures and Limited Time Offerings (LTOs)

In previous reports, we have encouraged moving away from frequent and complicated LTO menu items and to reinforce “Limited Menus.” We continue to make that recommendation, particularly as we are seeing some commodity groups affected by international supply chains disruption, which have the potential to be widespread and long lasting.

Our global survey also suggests that brands should be transparent and find ways to reassure customers about sourcing. A majority of respondents in the US and UK indicated distrust in the Food Supply Chain and a majority in the UK, US and Singapore were concerned about variety and availability of foods in the coming months.

Deciding Where to Eat Has Changed

The factors influencing dining decisions have changed substantially. As we noted earlier, visible hygiene practices and minimal contact are now among the top two factors that most influence consumers. As regions start opening their doors again, planning for adjustments to long held service standards that may be “unsafe” in a post-COVID world will be vital. A few practices that may require innovations/adjustments in order to meet a heightened sense of health and safety expected from consumers, stand out in particular: disposable menus, contactless payment options and buffet setups.


Menu Strategy

Restaurants most likely will continue to work on reduced menus when business resumes, as operators across the industry believe it will be a phased return back to normal.

Respondents to our global survey cited access to healthy and nutritious food as one of their top food-related concerns. Combined with supply chain concerns and a likely phased approach to recovery, we recommend that brands start with simpler/limited menus that focus on local sourcing, if possible, and healthy and nutritious options. Whether or not local sourcing is possible, we highly recommend providing a level of transparency of sourcing (for example provenance by state/country).


We realize these are stressful and unprecedented times. RMS is here for you. Reach out to us today if you are looking for practical recovery strategies designed to optimize menu profitability, sales and financial profitability that can be implemented by operators immediately.

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.