Operations

Restaurant sales, traffic not so merry during holiday season

Provided

January 26, 2021

Although restaurants across the world have been doing their best to pivot operations by expanding digital and contactless services, traffic and sales are still suffering, according to Revenue Management Solutions, which monitors POS data from nearly 100,000 restaurant locations in 40 countries.

Recent data revealed that December's first two weeks saw a drop in traffic and sales, likely due to the continuous rise in COVID cases, and that although sales and traffic improved for the holiday season, the numbers didn't live up to those reported during Thanksgiving week.

For limited-sales concepts, for example, traffic was down 13% year-over-year, a significant decrease from November when traffic was even. The gap closed to negative 8% YOY during the last two weeks of December, however.

The main drivers were twofold, said RMS Chief Strategy Officer Joel Davis.

"First, 2019 November and December figures were particularly strong, so it was harder for brands to achieve positive comp numbers based on that," he said in an email to FastCasual. "Second, many states reissued restrictions after a big spike in COVID cases after Thanksgiving, which likely affected sales and traffic."

Table-service performance was even worse, dropping from -40% YOY in November to -43% YOY in December. The last time it was that low was in June 2020.

Sales at limited-sales concepts were flat in the first two weeks of December but increased to +3% YOY during the holiday weeks, while sales at full-service brands dropped 44% YOY — another fall from November when sales were down 40% YOY

YOY traffic by daypart

RMS data revealed that breakfast YOY traffic took hit, down 21% YOY in December compared to -14% YOY in November. Lunch YOY traffic was down 9% YOY, which was an improvement over November when traffic was down 13% YOY.

Dinner also took a hit. Traffic was down 12% YOY during the first two weeks of December but increased during the holiday weeks, down just 6% YOY. In November, traffic was even.

YOY Traffic by revenue channel (Limited-service only)

Delivery saw a slight decrease in traffic from +54% YOY to +41% YOY, while drive-thru saw improvements from +16% YOY to +24% YOY. Dine-in remains stable at -43% YOY.

"Continuing to pivot to contactless channels will allow restaurants to recover at a higher level," Davis said: "As dine-in returns, we believe that it won't replace delivery/pickup. A new audience arose during COVID, who recognize the value of drive-thru/delivery/takeaway from the local restaurant or favorite chain. They are likely to continue this behavior after dine-in returns to pre-pandemic levels."

Christina Norton, director of Behavioral Research for RMS, reiterated the need for limited-service brands to focus on drive-thru and advancing technology, such as geofencing and advanced loyalty program technology.

(They should) "focus on an enjoyable and seamless drive-thru experience," she said. "Food actually ranks 4th in importance, behind accuracy, speed and service, according to RMS' most recent consumer survey.

RMS won't start looking at January's numbers until next week.