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More Consumers Avoiding Restaurants

As the restrictions on the way restaurants can serve consumers continue to become more widespread due to the ongoing COVID-19 pandemic, operators from all industries face daunting challenges when it comes serving customers.

Digital ProficiencyRoughly 94% of all U.S. restaurants are under some level of restriction due to the coronavirus, according to data from The NPD Group. As a result, overall visits to restaurants declined 36% for the week ending March 22.

Full-service restaurants represent the segment hardest hit, having experienced a 71% decline in consumer visits for the week ending March 22 compared to the same period one year ago. Customer transactions at quick-service restaurants, which represent the bulk of restaurant industry transactions and have more off-premises business than full-service restaurants, decreased by 34%.

On-premises represents 52% of restaurant industry dollars, and off-premises service, like carry out, drive thru, and delivery, represent 48% of dollars, according to NPD Group. For the year-ending February 2020, digital orders represented 13% of all off-premises dollars.

“It’s highly probable that this crisis will define winners and losers by their digital proficiency since consumers may prefer the contactless delivery protocol that digital ordering offers,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Now that we’re living in a world where the entire industry is an off-premise business, digital orders gain importance and provide an edge to those who already lead in that space.”

The decline in consumers’ use of restaurants coincides with how comfortable they feel dining out. For example, 62% of consumers now say they will avoid eating out, according to a study Chicago-based Datassential released on March 27. This is 9% higher than just 5 days earlier and 42% greater than March 10. In addition, 23% of consumers say they remain nervous about eating out but will still do so, down 4% since March 22. And 15% of consumers say they have no concerns about dining out, down 5% over the previous 5 days and 26% since March 10.

Among the options available to consumers, they continue to show confidence in ordering food from a meal kit delivery service, carryout/takeout, drive-thru from fast food and delivery from restaurants, per Datassential. Interestingly, not only are these the vehicles that make consumers the most comfortable, consumers’ perceived risk in these options has held steady the past few weeks.

When it comes to choosing which types of restaurants to support, 69% of those surveyed by Datassential said independents, while the remaining 31% said chains. When it comes to supporting those restaurants, the top three steps consumers are likely to take include ordering directly from the restaurant to ensure the business gets all the proceeds, ordering for pickup/delivery more frequently and tipping more.