COVID-19 Impact Report September 4, 2020

With COVID cases still not under control and traffic static for the last few weeks, contactless channels are the topic on everyone’s mind right now.

Staying up to date with the latest insights is fundamental for strategizing the best path to recovery. To help our clients navigate this ever-changing environment and allow them to make the best decision for their brands, we collect the latest restaurant data and consumer insights weekly. The following information for your consideration is as of Friday, September 4:

Overview

For the week ending August 23, YOY restaurant traffic trends remained in line with last week’s impact report. In fact, YOY levels have been static for the past 3 weeks, indicating that customers are settling into new comfort levels. Those that enjoy ordering food via contactless channels do so and will continue in about the same manner. Guests who are comfortable dining-in also are falling into a new rhythm. Unfortunately, negative YOY traffic does indicate a segment of customers that will continue to avoid restaurant food.

Over the weeks to come we will be watching closely to see how these trends will evolve as more kids return to school, employees start to return to offices, even if just a few days a week, and weather in the northern hemisphere starts to cool down which will reduce outside dining options for restaurants.

For the US

QSR v. TSR

  • QSR performance entered its fifth consecutive week of stable traffic, trending at negative 10% to 15% YOY. Sales remain flat to positive 5% YOY.
  • TSR traffic and sales remain in the negative 30% to 35% YOY range.

By Food Category

  • Chicken remains a winner, but overall growth has slowed. Traffic for chicken concepts is flat to negative 5% YOY. Sales continue to grow at 18% to 22% YOY.

Regional / Category

  • New England continues to outperform. Traffic for the region is negative 5% to 10% YOY and sales are positive 5% to 10% YOY.
  • Pacific, South Atlantic, Middle Atlantic and West South Central are still down with traffic between 5% and 10% YOY and YOY sales trending between positive 5% and negative 5%.

For Europe

Traffic remains down 20% to 25% YOY and sales are down 5% to 10% YOY.

For Asia

Overall traffic and sales remained static. Traffic is down 20% to 25% YOY and sales are down 25% to 30% YOY.

For Middle East/Africa

The Middle East/Africa traffic remains steady at negative 15% to 20% YOY and sales between 0% and negative 5% YOY.

Outlook

Delivery Continues to Grow

To better understand how consumer’s attitudes toward restaurants has changed, RMS asked 800 US diners to define their eating habits now, with delivery as a focus.

The bottom line? Contactless channels continue to grow, specifically:

  • The share of respondents using delivery increased by 9% since May.
  • Meal kits saw the biggest growth at 14%.
  • Millennials are more likely to use delivery – 38% of the generation order contactless at least 5x per week.
  • Gen Z increased its usage of delivery from May – August more than any other generation.

RMS_contactless_insights

Pricing Activity

Delivery Charges Continue to Exceed Expectations

While the pandemic has drastically increased how many customers order food for delivery or take out, there is still some apprehension around the service charges included at checkout. In our recent study, consumers told us that while they expect menu prices will be higher when ordering delivery online, 54% state that the actual delivery charges are higher than what they expected.

RMS_Delivery_Pricing

RMS_Delivery_Insights

Positively, 57% of respondents said they were likely to carry through with their orders despite the higher than expected delivery charges. But what about the 43% that said they wouldn’t? The majority (63%) reported ordering takeout instead and 84% said they were likely to switch to another restaurant. These insights indicate that restaurants with a final high delivery bill (menu prices + charges) are at significant risk of losing a customer to another restaurant. For more delivery insights, download our latest consumer report.

Industry Strategy

Comfort Food Innovations

Along with the success of chicken during the COVID crisis, comfort foods have also been successful at driving menu sales. One particular item, mac & cheese, continues to find demand across various restaurant segments. Companies such as Noodles and Bad Daddy’s Burger Bar have found that the popular dish can often serve as a “center of the plate” and can be promoted as a gourmet item through premium ingredients (ex. nontraditional cheeses) and unique presentations (ex. served via dough bowls). As families and kids continue to be the focus, mac & cheese will continue to be a good option on children’s menus.

RMS stands at the ready to support restaurant brands through these ever-changing times. Reach out to us today for practical recovery strategies designed to optimize menu profitability, sales and financial profitability immediately.