Digital orders and deliveries drive restaurant sales, full service still struggles

Digital restaurant orders and delivery orders were up for the month of March, according to the new figures of the NDP group. Despite — or more likely because of — state-mandated dining room closures, NPD reported that digital restaurant food orders increased by 63% and delivery orders by 67%.

Quick-service restaurants (QSRs) accounted for the majority of the increase in digital and delivery orders. That’s no big surprise, as many of these types of restaurants were already ready for offsite orders before the pandemic hit. In fact, as early as November 2019, the National Restaurant Association predicted that off-premises orders would drive the bulk of QSR restaurant sales over the next decade. Chains like McDonald’s and Chipotle were already running billion-plus digital businesses, and Starbucks recently said 80% of its orders in the U.S. were take-out orders before the pandemic.

The biggest hit has been taken by full-service restaurants. According to NPD, full-service restaurants “realized a 35% drop in traffic in the month of March compared to the previous year in March.” The company also noted that “pre-pandemic share of onsite traffic was 80% of FSR activity and offsite 20%.”

Shelter-in-place orders have obviously changed those numbers. Many full-service restaurants have tried to switch to off-site strategies. NPD notes that “FSRs able to offer pickup and delivery were able to increase the segment’s offsite traffic share by 31 percent.” But as we’ve already seen, moving from a model built primarily around restaurant traffic to one that relies on things like delivery and curbside pickup can be a complicated process that restaurants aren’t. not equipped to handle. Meanwhile, some restaurants, unable to weather the current storm, have closed permanently. Others have ceased operations citing health issues for their staff.

Even as states slowly begin to reopen, businesses will not return to their old restaurant models. Most restaurants will need to operate at reduced capacity — up to 25% in some cases — and consider implementing things like reservation systems and store redesigns to accommodate social distancing guidelines.

That said, transactions at full-service restaurants improved slightly, falling only 67% for the week ending May 3, from 71% the previous week. This is the third week in a row that these declines have improved, according to the NDP. Restoration restrictions have been lifted for approximately 192,000 restoration units in the United States, although many other challenges remain for the coming weeks. These include embracing technologies to enable more digital ordering, implementing contactless payments, and preparing for another possible wave of the pandemic at some point in the future.

NPD’s numbers echo what the company’s executive director, Susan Schwallie, mentioned last week during The Spoon’s virtual fireside chat. “COVID has been an accelerator for everything online and digital,” she said at the online event. In addition to online ordering, ghost kitchens are another tech-driven initiative that will stick with the restaurant world for the long haul.

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