U.S. restaurant industry hit hard by pandemic

The mandated restaurant dine-in closures that took effect across most of the United States beginning the week ending March 22 took a toll on U.S. restaurant transactions, reports The NPD Group. Total restaurant customer transactions declined by 36% in the week ending March 22 compared to the same week one year ago, according to NPD’s CREST Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 70 quick-service, fast-casual, midscale, and casual dining chains.

Customer transactions at quick-service restaurants, which represent the bulk of restaurant industry transactions and have more off-premise business than full-service restaurants, decreased by 34% in the week ending March 22 compared to one year ago. As full-service restaurants, which are heavily reliant on dine-in sales, struggled to convert quickly to off-premise modes, customer transactions dropped by 71%.

“It’s highly probable that this crisis will define winners and losers by their digital proficiency since consumers may prefer the contactless delivery protocol that digital ordering offers,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America, in a press release. “Now that we’re living in a world where the entire industry is an off-premise business, digital orders gain importance and provide an edge to those who already lead in that space.”

Additionally, a new National Restaurant Association (NRA) survey of 5,000 U.S. operators found that 44% have temporarily closed their restaurants, and 11% say they anticipate permanently closing within 30 days. As the coronavirus epidemic rages on, 3% of restaurant operators have already permanently closed their restaurants.

The survey found that nationwide sales were down 47% during the period from March 1 to March 22, forcing a majority to lay off employees and reduce their operating hours. When they are open, most restaurant operators (54%) have had to switch to off-premises service only. A full 88% of operators reported that total sales volume between March 1 and March 22 was lower than it was during the same period one year ago.

Based on the survey results, the NRA estimates that during the first 22 days of March, the restaurant industry lost an estimated $25 billion in sales and more than 3 million jobs.