Dine-In Restaurants Still Struggling in Wake of Pandemic

Dine-In restaurants are still suffering in a major way from the fallout of the pandemic, the NPD Group says.

Dine-in visits to restaurants were down 48% in the 12 months ending September 2021 compared to the pre-pandemic level in the year ending September 2019.

The brunt of the pain was felt by full-service restaurants as sales were 17% below this September compared to the September 2019 level. For year-over-year, they saw their business rise by 7% over a 23% decline September 2020 to the same month in 2019.

“The real headwind for the US foodservice industry remains on-premises occasions,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “The industry’s labor challenges and consumer reluctance to dine-in may keep restaurants, particularly FSR, at limited capacity and streamlined menus for the near future.”

Business for the restaurant industry as a whole was helped by a 20% surge in that two-year period from off-premises orders, like carry-out, drive-thru, and delivery.

Quick service restaurants are faring better than their full-service counterpart with visits to these outlets rising 4% overall in the year ending September 2021 compared to a year ago, declining 4% versus the same period ending September 2019.

Last month NPD noted the return of consumers to the fast casual restaurant segment, with online and physical visits to such restaurants up 8% year-over-year in August. By contrast, visits to fast casual restaurants were down 23% in June 2020 at the height of the pandemic. 

Fast casual restaurants suffered from a lack of drive-thru capabilities and off-premises operational efficiencies of traditional quick-service brands, NPD analysts said.

Drive-thrus in particular helped many restaurant chains survive during the pandemic, as they eased the burden on satisfying carryout orders and customers were well-accustomed to ordering food at those chains in that way. Drive-thru trips accounted for 42% of all restaurant visits in the second quarter of 2020, when pandemic lockdowns were at their apex.