Flipping trend, QSRs drive deceleration in transaction growth during key week in July: NPD Group
FSRs improve as restaurant dining rooms reopen
In a reversal of past trends, US quick-service restaurants (QSRs) drove a decline in total customer transactions during the week ending July 12, according to a new report from research firm The NPD Group. Total transactions decreased 14 percent from last year, 3 percentage-points worse than last week’s 11-percent drop. QSRs were the big story: That segment decelerated by 4 percentage-points and posted a 13-percent year-over-year decrease in transactions, while full-service restaurants (FSRs) cut their decline. Indeed, FSRs improved by 3 percentage-points to (26) percent versus last year, as per NPD Crest Performance Alerts.
“The flip in declines this week from quick-service restaurants to full service restaurants is a reminder that the world is unpredictable today, and we should expect twists and turns on the bumpy road to recovery,” said David Portalatin, NPD food industry advisor and “Eating Patterns in America” author.
Portalatin predicts that the long-term trends will hold for the foreseeable future, and QSRs will continue to have the upper hand due to their experience in off-premises sales, particularly through delivery and the drive-thru. The twists in the road come in the form of a return of state and local restrictions, which impact dine-in service. As an example of the many plots twists in this chapter of restaurant recovery from COVID-19, California closed dining rooms once again due to an exponential increase in coronavirus cases.
NPD estimates that the percentage of restaurants that are open for on-premises dining decreased from 90 percent of US restaurants to 82 percent, based on NPD ReCount. California generated much of the change and during the week of July 12, the state’s FSR transactions dropped by 6 percentage-points to (51) percent down from last year. During the week ending July 19, FSR volume was being generated completely by off-premises sale, and NPD has not yet reported on those transactions.
Restaurants in the state will be “ramping up delivery programs, streamlining menus and repurposing parking lots as temporary drive-thru lanes,” stated a NPD announcement. The dining room closures in California will impact the national scene due to the state having the largest number of restaurants. Without open dining rooms, a “new normal” will be created there and California restaurant operators’ resilience will be tested.
Photo credit: Michelle Henderson
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