US restaurant customer transactions declined by 41% in the week ending April 5 compared to a year ago, according to The NPD Group. This follows a 42% decline in the prior week ending March 29, which may indicate the industry is bottoming out.
The apparent “bottom” is likely due to the full effect of on-premise dining closures throughout the country and the industry’s collective ability to convert to off-premise modes such as carry-out, delivery, and drive-thru, The NPD Group says.
“The 41% decline in restaurant transactions is similar to last week and may indicate a bottom,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “We also need to be aware that further erosion could occur if consumers’ economic situations worsen. To date, many consumers have continued to buy restaurant meals through delivery, takeout, and drive-thru to the degree allowed by the restrictive environment; but with rising unemployment, payroll reductions, and temporary furloughs, consumers may begin to think differently about their food budgets overall.”
Quick service restaurants, which historically have more off-premise business than full service restaurants, experienced lower transaction declines (-38%) in the week than total industry, according to NPD’s CREST Performance Alerts, which provide a rapid weekly view of chain-specific transactions and share trends for 70 quick service, fast casual, midscale, and casual dining chains. Full service restaurants, which were already challenged prior to the COVID-19 outbreak, experienced transaction declines of 79% in the week ending April 5 compared to the same week year ago.