Impact Report May 8, 2020

We’ve experienced a generation-changing disruption of the Food and Beverage Industry landscape with the COVID-19 pandemic.

Throughout it all, we’ve been supporting our clients to make the best decisions for their brand under these unprecedented circumstances. Now, as countries start to reopen, we are being asked new questions about how to adjust to the ever-changing environment. To help guide our clients this week, we have collected the following information for your consideration as of Friday, May 8th:


The negative YOY traffic trends in the U.S. remain stable, Europe is starting to see a slight uptick in traffic, and trends across Asia were more negative than the recent week.

For the US: 

  • QSR continues to outperform TSR in both Traffic and Sales. QSR traffic has stabilized at 20 to 30% YOY declines and sales are flat to negative 5% YOY. TSR is still posting 60 to 70% declines YOY for both metrics.
  • QSR’ performance continues to be driven by Drive Thru where traffic is increasing by 25 to 35% YOY; sales are up 60-70%.
  • TSR shows subtle traffic improvements from week to week, primarily driven by Delivery and To Go meals, where traffic is up 80 to 90% YOY and sales are up 100%.
  • Overall brands that predominantly offer chicken products again outperformed the competition, with YOY traffic numbers of negative 5 to 10% but positive YOY sales of 5-10%.


  • Mountain, West North Central and West South Central divisions are performing best across the country with positive YOY sales (0 to 25%) despite YOY traffic declines of 15 to 20% .
  • Coastal divisions (Pacific, New England, Middle Atlantic and South Atlantic) are performing the worst with YOY sales declining 2 to 5% and traffic declines of 22 to 28%.

For Europe: Major brands as well as independents have started to open again for takeout, drive thru and delivery services in areas with lower infections. Traffic remains about the same as last week, with declines of 30-35% YOY.  

For Asia: YOY overall traffic continues to drop. This week’s declines were as much as 30 to 40% YOY after stabilizing 3 weeks ago at declines between 10% to 20%. This is a direct result of some brands closing their restaurants. But as positive number of COVID cases in local community are reducing, measures are eased.  For some regions though these changes will only come in from mid-May onwards.

For Middle East/Africa: YOY traffic and sales trends are steadily increasing since the sheer drop due to Ramadan on April 23. Since then, YOY traffic is trending around negative 75%.


Slow Return of the Customers

Despite the relaxing of strict social distancing guidelines and restaurants starting to offer more services, traffic growth remains slow. Consumers seemed concerned with patchwork regional responses and differing opinions of what it takes to re-open, and are facing a conflict between escaping isolation at home and adhering to social distancing guidelines. During the next weeks, we will closely monitor when and how these consumers decide to end their “self-quarantine” and re-enter their communities.

Pantry Fatigue

Guests are growing increasingly tired of “Food at Home,” expressing a desire to return to a bit of normality, and to dine out in order to remember and celebrate happier times. 

But in order for customers to feel safe dining out, they need assurances. Based on our own research insights with consumers in the U.S. and the U.K., top food-related concerns remain safety/hygiene and customers report that visible employee hygiene practices are among the most important factors in how they choose a restaurant.

Consumers also expect restaurants to help them maintain the recommended/required 6-foot distance. Restaurant operators will need to remove tables to expand space, limit seating capacity, and limit waiting areas. In addition, consumers are likely to expect establishments to offer contactless payment options (Apple Pay, Google Pay, or bank mobile apps).

Pricing Activity

Pricing as Restaurants Start to Reopen Again

Now more than ever, consumers have a low tolerance for any perceived price increases that are deemed to be opportunistic or unnecessary. However, many restaurant brands may need to take price as relief measures (rent relief, deferral of royalty payments, etc.) are reduced and debt obligations come due. Accommodating these competing demands may be difficult, but consumers may accept some price increases if they are dependent on the following market factors AND communicated clearly.

  • Visible increases in grocery pricing: If commodity scarcity causes increases in food costs, it’s likely consumers will also be feeling the pain in their grocery bill and will be more likely to understand restaurant price increases taken for this reason.
  • Price moves made by others in the market: The visibility of price changes already made by other brands in the market may help customers to be less sensitive to them. Smaller, local and independent restaurants will have to make these moves first, particularly when only allowed to open at reduced capacity.
  • Minimum wage or other highly visible market factors: Even before the COVID crisis, highly visible (and often well publicized) market changes such as minimum wage increases help when communicating the need for taking price. Brands should avoid taking one-time steep increases, but look to smaller increases over time. A staged approach allows brands to measure customer’s reaction/willingness to pay and make necessary corrections.

Value Continues to Reign

Larger combo-meals and family deals continue to be popular, likely due to:

  • Limiting contact frequency. Customers told us that one of the main deciding factors when buying food from a restaurant was maintaining safe proximity to others.
  • Left-overs can be reheated next day, so consumers recognize a good value, important at a time when unemployment rates are rising.  
  • “Meal kits,” give guests the ability to experience their favorite restaurant meals in the safety of their homes.

Industry Strategy

Employees Returning to Work

With re-openings, the health and safety of returning restaurant teams has been an important consideration. Outside of providing the right environment and protective equipment (ex. masks, gloves and hand sanitizers on display), restaurants will need to incorporate new processes to keep employees and guests safe. These could include: new “customer flow” (ex. separate entrance, seating and exit procedures), a way to manage “infractions” of social distancing and sanitation procedures, scheduling changes that allow management to track/trace exposure to future COVID cases. Employees will need to be trained thoroughly on all changes.

What percent capacity is profitable?

As markets reopen, authorities are imposing restrictions on maximum capacity (25% of pre-COVID seats, for example). The vast majority of restaurants won’t be able to operate profitably at these levels. But brands are using reopening to re-hire teams and provide income to those who have been out of work for months, in some cases.

Delivery, take-out and drive thru will continue to bring in most revenue until further limitations are lifted.

Menu Strategy

The big question for restaurants as they prepare to reopen their doors is: what will customers order on the first trip back. According to Datassential’s latest survey results, consumers are excited to go back to their “normal life” and eat their favorite meals. 79% of respondents are planning to order their familiar favorites and only 21% are looking forward to trying something new. When limiting menus, it will be important to have favorite items included.

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

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.