Corporate Profiles - 2020 - 48

INDUSTRY REVIEW: FOODSERVICE

Foodservice
Pandemic prompts streamlined menus, expanded off-premises capabilities
he foodservice industry suffered more job losses than any other economic
sector during the coronavirus (COVID-19) pandemic and was expected
to hemorrhage as much as $240 billion in sales by the end of the year,
according to the National Restaurant Association (NRA), Washington.
Restaurant closings began in mid-March, and within several weeks all but
three states had ordered dining rooms closed. Nationwide restaurant sales declined nearly 47% in March, the NRA said, resulting in industry-wide losses of
$30 billion. By the end of the month, an estimated half of the industry's 15
million workers had been laid off or furloughed.
The declines accelerated, and within two months state-mandated stay-athome orders and forced dining room closings resulted in approximately $120
billion in lost sales. Transactions hit their nadir in mid-April, the same week
Americans began receiving the first round of government-issued stimulus payments, then gradually improved as dine-in restrictions eased.
With restaurant capacity capped and consumers hesitant to return to on-premises dining, takeout, delivery and drive-thru became essential revenue streams.
Off-premises orders doubled and even tripled from pre-COVID levels, according
to Rabobank. Restaurants that already had capabilities in touchless transactions and

e-commerce were well positioned to meet changing consumer demands, with brands
including, Papa John's International, Inc., Domino's Pizza, Inc., and Yum! Brands, Inc.
subsidiary Pizza Hut, hiring thousands of new workers during the pandemic.
Drive-thru visits increased 26% to account for nearly half of all transactions between April and June, when mandated closings reached their peak. In July when more
restaurants were reopened drive-thru visits still increased 13%, the highest visit increase among all on-premises and off-premises models, according toThe NPD Group.
While overall visits declined to a historic low of -17% during the peak stay-athome period, the quick-service restaurant (QSR) segment fared better than others,
thanks to an abundance of drive-thru windows, capacity for high-volume pickup
and an ability to leverage digital apps and provide a contact-free experience.
"Drive-thru operations are delivering a high ROI during the pandemic, offering convenience, speed and the comfort of social distance," said David Portalatin,
food industry adviser at The NPD Group, Port Washington, NY. "Drive-thru and
other off-premises operations will be a major part of the US restaurant industry's
recovery and future."
Quick-service chains reinforced their off-premises prowess by expanding drive-thru
capacity with reconfigured traffic flow and added lanes. Chick-fil-A, Inc. introduced

restaurant weekly transactions

US
PERCENT CHANGE FROM YEAR AGO
20%
0%

QUICK-SERVICE RESTAURANTS

-20%
-40%

TOTAL

-60%

FULL-SERVICE RESTAURANTS

-80%
-100%
2

Feb. 2020

March

April

May

June

July

Source: The NPD Group, Inc.

eating and drinking place sales

TOTAL
IN BILLIONS

$64.6

$65.0

$64.9

$64.3

$65.0

$65.6

$65.4

$45.7

$30.0

$39.4

Aug. 2019

Sept.

Oct.

Nov.

Dec.

Jan. 2020

Feb.

March

April

May

$52.5

June

July

Note: figures are seasonally-adjusted

Source: US Census Bureau

48 \ October 2020

$49.9

Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Pet Food Processing

Corporate Profiles

Corporate Profiles - 2020

Table of Contents for the Digital Edition of Corporate Profiles - 2020