U.S. restaurant transaction declines may have bottomed out

U.S. restaurant customer transactions declined by 41% in the week ending April 5 compared with the same week a year ago, following a 42% decline in the prior week ending March 29, which may be an indicator of the industry bottoming out, reports The NPD Group. 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 41% decline in restaurant transactions is similar to last week and may indicate a bottom; we also need to be aware that further erosion could occur if consumers’ economic situations worsen,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “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 the entire industry, according to NPD’s CREST Performance Alerts. Full-service restaurants, which were already challenged before the COVID-19 outbreak, experienced transaction declines of 79% in the week ending April 5 compared with the same week one year ago.