Digital Ordering, Off-premises Services Are Silver Linings for Restaurants
A new report from market researcher The NPD Group says the dark clouds of 2020 yielded silver linings for the U.S. restaurant industry — as in digital ordering and off-premises services, which will drive future industry growth.
“Throughout one of the most challenging years for U.S. restaurants, the industry demonstrated its resiliency against a variety of headwinds throughout 2020 by rising from a -35% traffic decline in April to a -11% visit decrease in December compared to a year ago, NPD said. Although mandated dine-in restrictions have held back all restaurant segments, particularly full-service, consumer demand for restaurant meals and the ability to serve the demand with a host of off-premises services, like digital ordering, delivery, drive-thru and carry-out, are the silver linings that enable the industry to persevere.
Restaurant digital orders, which were growing prior to the pandemic, increased by 19% in January of 2020 to 145% in December 2020 compared to the same months in 2019, according to NPD’s daily tracking of consumers’ use of restaurants and other foodservice outlets.
Like digital ordering, carry out, delivery and drive-thru were also growing before the pandemic. Carry out, which represents the largest share of off-premises modes, increased orders by 3% in January 2020 and by 10% in December 2020 versus the same months in 2019. Carry out ended 2020 holding 46% of off-premises order share.
Delivery began 2020 with orders up by 1% and ended the year with a triple-digit gain of 137% in orders compared to year ago. But even with the triple-digit gain in orders, delivery still holds the smallest off-premises order share at 11%, so there is room to grow. Drive-thru, an ordering mode that was already well-developed at quick-service restaurant chains when the pandemic hit, increased orders in 2020 from 4% in January to 22% in December versus 2019 and ended the year with a 44% share of off-premises orders.
“Digital orders for pickup and all off-premises modes will be a growth engine for the U.S. restaurant industry moving forward,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Consumers, both new and former users, have now experienced the convenience of digital ordering, especially for carry-out and delivery, and will continue using these services long after the pandemic is over.”