Restaurant customer transactions dropped 42 percent during the week ending in March 29 compared to the same time period one year ago, according to new numbers from The NPD Group.
While dismal, to say the least, those numbers aren’t surprising. With most states now mandating restaurants keep dining rooms closed for the foreseeable future, many businesses have lost their primary sales channel. Full-service and casual dining restaurants (think Olive Garden or your local Mexican restaurant) that still rely on foot traffic for the majority of their sales are having to quickly pivot to off-premises models that offer delivery and takeout orders. Restaurants designed for an in-dining room experience are having trouble making this transition smoothly and quickly.
Reflecting that issue, NPD notes that while QSRs (e.g., Wendy’s) saw a transaction decline of 40 percent, full-service restaurants shouldered the burden of a much larger drop, at 79 percent.
“The transaction declines partially reflect the struggle of on-premise restaurants to pivot to off-premise models,” NPD industry advisor David Portalatin said in a statement. “Many restaurants that are attempting to make the move are doing so with limited menu offerings and without the benefit of drive-thru lanes. Anecdotally, some operators are giving up the cause and closing altogether.”
Some of those closures are temporary; others, sadly not. Recent numbers from The National Restaurant Association show that 3 percent of restaurants have closed permanently and another 11 percent are expected to this month.
Some restaurant-tech companies, like Allset and Presto, have shifted their focus to providing products and services that could make to-go operations more efficient. Others, like Ordermark and Chowly, are waiving certain fees for restaurants that want to get quickly up and running with delivery. Meanwhile, a number of charities, fundraisers, and other initiatives are working to provide relief to impacted businesses and their workers.
It’s too soon to tell how effective any one of these solutions is in terms of saving more businesses in the long term. Given that major restaurant chains as well as the smaller businesses are now struggling financially, even cautious optimism feels naive right now.
For us average consumers who can afford it, the best course of action right now is to keep ordering takeout from local restaurants and contributing to relief funds, virtual tip jars, and other online initiatives. Soon enough, the numbers will tell us if these moves can make a big enough difference.