In recent weeks, total Quick Service sales are now positive across the country and have surpassed pre-COVID levels in all regions except the Northeast.
As Quick Service has recovered, the areas driving that improvement have been:
- The rebound of Sandwich and Coffee channels,
- The continued strong performance of Chicken and Burger,
- Sustaining high check size growth, even as transaction volume increases, and
- Improvements at breakfast and with core value-conscious consumer segments.
Read on for a deep dive analysis of Quick Service Restaurant consumer behavior.
Why are consumers choosing restaurants?
As COVID has progressed, craving/comfort drivers are becoming more and more important, likely due to pantry fatigue and a desire for some sense of normalcy. Consumers are also looking at service and accessibility levels when choosing restaurants.
How much are consumers spending on restaurant channels?
When looking at consumers' share of wallet in the Quick Service channel, the top-performing category in recent weeks has been the Chicken market, which includes brands like Chick-fil-A and Popeyes. Chicken QSR brands are now exceeding their pre-COVID performance in Q1 when it comes to share of wallet.
The Coffee and Sandwich sub-channels, which were hit hardest during the peak COVID period in late March and early April, have seen the biggest recovery in recent weeks. They're actually up in terms of total spend YOY in recent weeks.
Workers are going back to the office, which is good news for restaurants
Surveys show that for the second week in a row, 63% of full-time workers are actually going into the office as opposed to working from home.
At its lowest point back in April, only 55% of full-time employed workers were commuting into the office, so this means there is a significant improvement in commuter breakfast and working lunch occasions for restaurants.
Consumer QSR spending has improved the most in the Northeast region
When looking at our credit/debit card panel of 6M consumers, we see that spend per capita on QSR restaurants is officially up year over year in the most recent period of mid-July and early August. QSR spend per capita is up year over year in all regions of the country, but is currently highest in the Midwest.
QSRs in the Northeast were hit hardest and saw the greatest declines in consumer spending during peak COVID. Since then, the Northeast has also seen the largest recovery, but currently has the lowest YoY spend per capita out of all four regions.
QSR sales performance during COVID
Total QSR sales took a big hit in late March, mostly driven by fewer transactions. However, check size increased and has stayed fairly high. Simultaneously, transaction volume has recovered in the last few months and is now almost flat year over year.
Recovery has also been driven by the Breakfast daypart, which has seen an increase in share of visits as lockdowns began to lift and consumers returned to their work commutes. Late Night continues to be the hardest-hit daypart for share of visits, and has not seen much of a recovery.
Who is driving QSR's improved performance?
The consumer segments that are trending upward in their QSR visitation are those that skew toward Value-consciousness - the core QSR consumer. Meanwhile, consumer segments that skew toward Premium tastes are trending downward in their QSR visitation.
Which QSR brands are performing best in terms of consumer spending?
In terms of direct first-party sales, the brands that have seen the biggest increase in spend per capita year over year are Sonic Drive-In and Popeyes Louisiana Chicken, with huge double-digit increases over 2019 spending.
Other brands have made a significant recovery since their lowest point during peak COVID - brands like Starbucks, Subway, Dairy Queen, and Wendy's have made the biggest comeback in recent months.
When it comes to third-party delivery spending, McDonald's is leading the pack in terms of market share on DoorDash. Coming in at a distant second is Wendy's, then Popeyes and Taco Bell.
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