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Food Service Industry Updates

As if the Virus Wasn’t Bad Enough for Restaurants

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If closings and restrictions related to the pandemic weren’t bad enough, restaurants in many parts of the country also had to deal with severe weather in February, which effected their performance.

According to market researcher The NPD Group, the bad weather hampered the softening of customer transaction declines at major U.S. restaurant chains reported in the last few months of 2020 and in January. Major restaurant chain customer transactions declined by 13% in February versus a year ago, compared to a 9% decline in January, according to NPD’s CREST Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 75 quick-service, fast-casual, midscale and casual dining chains representing 53% of the commercial restaurant traffic in U.S. 

Record-shattering cold, snow and rain affected a large swath of the U.S. in February. Texas, the second most populated state after California, was hit with a winter storm in mid-February that dropped significant amounts of snow along with a cold wave across the state. As a result, the state’s power grids — unable to sustain the higher-than-normal energy and heating demand from residential and business customers — failed. During this period, customer transactions at major restaurant chains in Texas declined by 46% compared to year ago, NPD said.

Customer transactions at major full-service restaurant chains, which have been challenged throughout the pandemic by mandated dine-in restrictions and shutdowns, decreased by 33% in February versus a year ago, reports NPD. Major quick service-restaurant chains, which represent the bulk of the restaurant industry transactions, realized a 12% decline in customer transactions in the month compared to year ago.

“Aside from any unforeseen events or severe weather in major parts of the country, we should see customer transaction declines improving in the months to come,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “The next several months will help us plot the course for the U.S. restaurant industry’s recovery.”

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