A resurgence of COVID-19 cases across the country and the subsequent rollbacks in reopening plans have stalled the U.S. restaurant industry’s recovery, reports The NPD Group. In the week ending July 19, major restaurant chain total customer transactions are down 12 percent versus a year ago, compared to 14 percent in the prior week, according to NPD’s CREST Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 75 quick service, fast casual, midscale, and casual dining chains representing 53 percent of the commercial restaurant traffic in United States
The NPD Group reported in the week ending in July 19, 78 percent of restaurants are in geographies that permit on-premise dining with varying capacity restrictions. However, California has 13 percent of the nation’s restaurant units, all of which are prohibited from offering on-premise dining. Many restaurants are also operating well below normal capacities in terms of menu offerings and store hours, which are operator decisions being made partly due to the pandemic and partly due to difficulty attracting labor, the NPD Group notes.
Quick service restaurant chains (QSR) were responsible for the improvement in customer transaction declines, which were at 11 percent year-over-year, while full service restaurant chains (FSR) declined to 27 percent year-over-year. According to the report, FSR transactions would be worse without a significant shift to off-premise dining.
“I believe there is still a lot of upside recovery for restaurants, but for now we’re stuck in neutral until we can get the industry operating at full capacity,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “The ‘recovery’ phase will then tell us whether the industry can recapture enough customer traffic to get back to the pre-COVID baseline, or whether the new normal will reflect a re-set where consumers prepare more meals in their home kitchens for a longer term.”