Drop in Restaurant Sales Offset Somewhat by Digital Orders, Carry Out

While transactions have declined at chain restaurants, things could have been a lot worse. 

The NPD Group reports that customer transaction declines at major US restaurant chains held steady at negative 9% every week in October compared to the same weeks a year ago.  

Quick service restaurant chains, which have shown more strength during the pandemic, also posted transaction declines at negative 9% throughout the month. 

Full-service restaurant chains, which rely on dine-in services, saw transaction declines fluctuate from negative 16% in the first week of October to negative 14% in the last full week of the month, according to NPD’s CREST Performance Alerts.

But there were some stabilizing influences for the month, such as digital and off-premises restaurant orders. As dine-in services continued to be hindered by COVID-19, digital restaurant orders from mobile apps, text messages and the internet grew by 138% in July, August and September compared to the same quarter year ago, according to NPD Group.

Off-premises orders from carry-out, delivery, and drive-thru also helped restaurants maintain sales. Those transactions increased by 22% in the quarter compared to a year ago, while on-premises and dine-in declined by 62%.  

Delivery posted the sharpest gains in the quarter, jumping 106%. Still, it had the smallest traffic share at 9% of off-premises services. Carry-out held the largest traffic share at 46%, with visits up 9%. Drive-thru visits grew by 27% in the third quarter and represented 44% of off-premises visits. Restaurant visits declined by 10% overall in the quarter compared to the same quarter year ago, based on NPD’s CREST foodservice research.

“While some of the steep transaction and traffic declines experienced at the height of the mandated shelter-at-home and dine-in closures have been recovered, many uncertainties lie ahead for the industry,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America said in a statement.

But while the , QSR investment sales are performing well despite the pandemic, according to the NNN Market Intelligence Report Chris Pappas, associate director with Marcus & Millichap’s Net Lease Division.

In the second quarter of 2020, franchisee-leased properties accounted for more than 70% of the market. “A lot of QSR business models have changed to focus on franchisee locations and not corporate locations because of the Wall Street asset-light model,” Randy Blankstein, president of The Boulder Group, told GlobeSt.com in an earlier interview. “The theory is that they’re the brand and they don’t need to be at every stage of ownership at all of the properties.”