Impact Report July 17, 2020

Coronavirus numbers continue to rise, causing markets to pause or scale back reopening.

We will continue to help our clients navigate this ever-changing environment with restaurant data and consumer insights that allow them to make the best decisions for their brand. To help guide our clients this week, we have collected the following information for your consideration as of Friday, July 17th:


For the week ending July 5, 2020, traffic in the US, Europe, Asia and Middle East/ Africa remained stable, despite the number of positive COVID cases increasing in many areas. Slight improvements of between 1 to 5ppt were seen in the US, Asia and Middle East/Africa compared to the previous week. In Europe, traffic decreased slightly, trending at negative 35 to 40% YOY.

For the US


QSR traffic and sales lifted slightly during the Independence Day holiday week. Overall traffic is down 10 to 15% YOY. Sales remain flat to positive 5% YOY.

  • Drive-thru still outperforms all other areas in QSR restaurants. YOY traffic improved 3-5ppt for the week, trending at positive 15 to 20% YOY growth. Sales are up 35 to 40% YOY.
  • ‘Dine-in continues to hold the drop we observed in the prior week, likely due to increasing COVID cases and more closed dining rooms. Traffic and sales remain down 65 to 70% YOY.

TSR (Table Service Restaurants) saw a big effect over the holiday weekend, both YOY traffic and sales dropped by over 5ppt compared to the prior week. Traffic and sales are both down 40 to 45% YOY.

  • Delivery, ‘to go’ meals and dine-in all showed declines this week. To-go traffic and sales remain higher than last year, about 100% YOY.
  • ‘Dine In’ traffic and sales dropped back quite a bit compared to the prior week, trending now at negative 55 to 60% YOY.

By Daypart

Dinner YOY traffic continues to slowly and consistently improve, and now trends at negative 5-8% YOY compared to declines of 10% for most of June. YOY sales started to outperform lunch figures by 1-3ppt in the middle of June and continue to do so into July. Dinner sales in July grew to 8-10% YOY.

Lunch YOY traffic also improved slightly from negative 10% in June to negative 8%. The growth of lunch sales slowed slightly, trending now at 5-8 ppt growth, compared to 8-10 ppt in June and 12-15 ppt in May.

Breakfast YOY traffic and sales trends remained at June levels; traffic is down 20% YOY and sales are down 5-8% YOY.

Late night continues to lag other dayparts and declined slightly further since June. Traffic for the segment is down 20-25% YOY and sales are down 10-15% YOY.

By Food Category

Chicken continues to lead other categories with traffic flat to negative 5% YOY. Sales are positive but are growing at a slower pace than in May and June —YOY growth was 10-15% this week.


Rapid increases in COVID cases brought back renewed restaurant restrictions in California, Oregon, New Mexico and Texas. California has reinstituted dining room and created new industry restrictions, further complicating a return to normal business in the foreseeable future.

  • Mountain, East South Central and West North Central performed best this week with sales ranging between 0% to +5%. YOY traffic is still down 5 and 10% YOY.
  • Coastal divisions (New England, Middle Atlantic, Pacific and South Atlantic) saw the most negative impact. Traffic declined 10 to 15% YOY and sales range from negative 5 to positive 5% YOY.

For Europe

Many European countries started to reopen for dine-in customers over the past month. YOY trends continue to slip slightly, with traffic down 35% to 40% YOY and sales down 15% to 25% YOY. This is a combination of lack of foreign demand generated by tourists, a significant number of independent restaurants still being closed and residents continuing to work from home.

For Asia

YOY overall traffic remains like the prior two-week figures, but with another slight upward trend. Traffic is down 25% to 30% YOY. Sales increased to between negative 25% to 30% YOY. Dine-in options (or “lobbies” as this service is called in Asia) are now available again in Japan, South Korea, Taiwan, Thailand, Indonesia, Philippines and Singapore.

For Middle East/Africa

This week we continued to see positive momentum for the Middle East/Africa region. YOY traffic ended between negative 15 to 25% and sales between 0 and negative 10%.


Changes in Workspace Dining

Return to office work has been delayed in many places, particularly the US, but experts are already speculating how dining at work will change. According to CNN Business, office workers can expect the following:

  • Emphasis on single serve/individual portioning
    • Buffets for meetings being replaced with box lunches or single bagged meals
    • Mass lunch outings (and crowded elevators) being replaced by more staggered lunch timing
    • Common beverage areas (and communal coffee) becoming single serve
  • More lunch restaurants focused on pickup
    • Both for speed of service and health and wellness, there is a renewed focus on individual meals ready for pickup and to-go
  • Automation
    • Potential shift towards “advanced vending machines” to provide meals closer to the office that still offer good food quality

Pricing Activity

European Tax Cuts Aim to Help Restaurants Survive Re-openings

Governments across Europe (Germany, UK, Austria, Belgium) are cutting taxes for the hospitality sector to prevent millions of job losses should businesses collapse. Restaurateurs fear that even with the help of sector-specific cuts to value-added tax (VAT) — a sales tax paid by consumers in all EU and most European countries — they may not be able to survive.  As it relates to pricing, VAT changes are being implemented differently. Some brands are passing savings/discounts to customers while others rely on the additional income for the road to recovery.

Price Timing in Pandemic

The uncertainty around market re-openings and re-closures adds complications to potential price increases traditionally expected in Fall. Market headwinds make increases a necessity for many brands, but as uncertainty lingers brands debate the appropriate timing. Should we act sooner ahead of another market closure or next year and potentially have more rounds with higher increases?

Unlike pre-COVID, customers are more aware that prices will increase and are likely to continue to do so for some time. When we asked different generations in the US if they believed prices would increase as a result of COVID, older generations overall anticipated higher price increases than the younger generations. To learn more about attitudes toward pricing, download our latest report: COVID-19 Impact on Restaurant Consumers July 2020 Update – Generational Insights.

Credit card data indicates spending at large restaurant brands has recovered while the rest of the industry still struggles to close the gap

A recent study compiled by Bank of America indicate that credit card spending is higher at large restaurant brands than at smaller independent brands. This is a big change from the start of the pandemic when spending was about equal among the two business types. While larger groups were able to close the gap created by COVID, spending at smaller groups is still down 20%. This may be due to larger brands’ ability to invest in limited contact channels like drive thru, take-out and delivery, which are now in high demand. In our recent US consumer survey, an average of 30% of respondents reported using delivery, take-out or drive-thru more than pre-COVID.

Industry Strategy

Nationwide Coin Shortage

Many consumers were greeted this week with signage regarding a national coin shortage and the subsequent push away from cash payments. Although this may be a short-lived phenomenon, it has led to new solutions, such as:

  • Change current price points to be more “change friendly” after tax
  • Offer opportunities to automatically “round up” for charity
  • Encourage digital payments

Vending Goes Contactless

The use of QR codes to eliminate the “touch component” of item selection has increased, creating a contactless experience for consumers. Coca-Cola’s Freestyle soda machine has showcased this ability, allowing guests to use their smartphones to make drink selections automatic.

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.