Off-premises sales not enough to offset lost on-premises business

With on-premises capacity limited – and sometimes nonexistent – during the pandemic, restaurant operators had no choice but to sharpen their focus on off-premises business. This was particularly true in the fullservice segment, with roughly one-half of operators saying they devoted more resources to expanding the off-premises side of their business since the beginning of the COVID-19 outbreak in March 2020.

As restaurants added new off-premises options in recent months, consumers responded by increasing their usage of takeout and delivery. National Restaurant Association survey data shows that a higher proportion of consumers are ordering off-premises meals from restaurants than before the pandemic – especially for the lunch and dinner dayparts.

Prior to the coronavirus lockdowns, just under 60% of adults said they ordered takeout or delivery from a restaurant for their dinner meal during the previous week, according to weekly surveys conducted by the Association. During the last 9 months, an average of 65% of adults ordered takeout or delivery for dinner on a weekly basis. 

The trend is similar for the lunch daypart. Over the last 9 months, an average of 46% of adults ordered takeout or delivery for their lunch meal during the previous week. In early March, only 37% of adults reported similarly.

Not filling the on-premises void

Across each of the six major industry segments, off-premises represents a larger proportion of sales than it did pre-COVID. However, for the vast majority of operators, this wasn’t nearly enough to offset their on-premises sales losses.

This was particularly true in the fine dining segment. Among fine dining operators who say their off-premises business increased compared to pre-COVID levels, 77% say their additional off-premises sales have made up less than 20% of their lost on-premises sales. Fully one-half of fine dining operators say their higher off-premises sales have made up less than 10% of their lost on-premises sales. Meanwhile, only 4% of fine dining operators say their added off-premises sales recovered more than half of their lost on-premises business.

In the family dining and casual dining segments, just over one-half of operators say their additional off-premises sales made up less than 20% of their lost on-premises business.

Results were somewhat more favorable in the limited-service segment, with roughly one in four operators saying their additional off-premises sales made up more than half of their lost on-premises business. Still, most limited-service operators say it was only enough to offset a fraction of their on-premises sales shortfall.

Read more analysis and commentary from the Association's chief economist Bruce Grindy.