Full-Service Restaurant Spend Falls Below 5 Percent, Report Says

Black Box Intelligence Wednesday released its latest look into the immense impact COVID-19 is making on the restaurant industry.

Guest check growth, year-over-year, slowed considerably to 0.5 percent during the week ending March 22. It averaged 2.5 percent for the previous four weeks. This might be related to alcohol sales and beverage attachment dropping significantly with takeout and delivery-only channels. As well as upselling in general, like dessert and appetizers.

Full-service restaurants managed to increase off-premises sales, but the offset of lost dine-in business remains low. Full-service chains in all states posted same-store sales declines of 60 percent or lower.

Full-service restaurant share-of-stomach spend fell below 5 percent as grocery sales skyrocketed 73 percent compared to the same week last year.

The mid-afternoon sales daypart is holding up the best. Late night the worst.

Consumer visits declined for restaurants and increased for all forms of grocery stores. Consumers with higher income reported the greatest declines in restaurant spending, electing instead to stock up on groceries.

Gen Z year-over-year restaurant spend fell 22 percent compared to Baby Boomers, which plummeted 43 percent.

Off-premises guest sentiment reported three times more positive in March for full-service restaurants compared to February. And takeout net sentiment climbed to 11.6 percent after months of negative scores.

Restaurants that promoted the #TheGreatAmericanTakeout campaign on March 24 earned three times the amount of chatter and two times higher net sentiment scores.

Sense360 also released some data Wednesday that showed a continued decline in total foot traffic.

The company typically analyzes foot traffic using relative metrics like market share and share of visit, but given the new landscape, it's more important than ever to understand absolute changes to foot traffic, it said. Note that the traffic metrics below encompass in-person visits like drive thru, pickup and take-out, but not delivery.

Sense360 said the steep decline in total foot traffic appears to be leveling off. That doesn’t mean it’s stabilized, though. The company measures comparable days. On March 27, for example, total traffic was down a full 58 percent versus the average Friday in February.

This past week, the total decline of restaurant and bar foot traffic generally held in the negative 50 to 60 percent range, month over month. It peaked March 22. Starting the following day, it slightly recovered and has hovered there since. March 23 coincides with an increase in Google searches on social media campaigns, like #TheGreatAmericanTakeout, as well as other efforts by restaurants to drive more pick-up and delivery, and just the tailwind of the word being out there with guests.

“Although it appears that restaurant foot traffic is stabilizing compared to February, this doesn't mean year-over-year comps are stabilizing,” Sense360 said. “Normally, there is annual seasonality at play in which traffic normally grows in March. So, even though the pattern is holding somewhat constant, in a normal environment, we would expect that traffic in March should steadily be growing over time.

In sum, this data doesn’t warrant too much optimism just yet. It’s simply a stabilization of free-falling visitation numbers. But we’ll keep a close eye for data that forecasts a return to normalcy.