Food & Beverage

Restaurant transactions improve 27 points from April rates

Photo: iStock

January 8, 2021

The U.S. restaurant industry closed one of the most unpopular years in history moving its way out of the steepest declines the industry has experienced since the Great Recession, The NPD Group said in a news release.

Customer transaction declines at major restaurant chains in December were down 10% compared to same period year ago. That is still a 27-point improvement from April, the height of the shelter-at-home and restaurant dine-in closure mandates, when transactions declined by 37% from a year ago, according to NPD.

Major quick-service restaurant chains — which represent the bulk of restaurant industry transactions — learned to expand their already high capacity for off-premises volumes. The chains' carry-out, drive-thru and delivery orders soared throughout the pandemic as consumers looked for relief from preparing most of their meals at home.

QSR customer transaction declines bottomed out in April when they declined 35% versus one year ago, but then quickly improved as shelter-at-home orders were lifted. In December, QSR chain customer transaction declines were down just 8% versus last year.

"The struggles of the restaurant industry are well-documented and we acknowledge that some operators have not survived the pandemic," NPD food industry advisor David Portalatin said in the release. "But history has shown that consumers will always value the convenience, quality and experience of restaurant meals, and the operators that deliver against these expectations have proven it's a winning formula in good or bad times. Our industry is resilient and consumer demand for restaurants remains strong."

Full-service restaurant chains, which primarily rely on dine-in customers and had few if any off-premises services when the dine-in restrictions went into effect, bore the brunt of the transaction declines throughout the pandemic. In April, the segment's customer transactions declined by 70% compared to year ago. In December, the segment improved its declines to falling 30% from the previous year's numbers.

For full-service restaurants now, it's about government restrictions. In more restrictive states, full-service restaurant chain transactions are down 60% to70%. In less restrictive states, there isn't as much of a gap between QSRs and full-service, NPD said.

NPD Group works with more than 2,000 companies worldwide to source data and predict performance. The company is based in Port Washington, New York.