Easing of dine-in restrictions helps improve restaurant sales and traffic declines in August: report

Toronto – As the last regions of the country began to welcome customers back for indoor dining, the double-digit dollar declines the Canadian restaurant industry has experienced during the COVID-19 pandemic eased in August, The NPD Group reports.

Consumer spending declined by 22 per cent in the month compared to same time year ago and visits to restaurants declined by 19 per cent, although Ontario and Quebec lag the rest of the country, with declines of 21 and 22 per cent, respectively, according to NPD’s CREST service, which tracks daily restaurant use across Canada.

“Full-service restaurants, in particular, will need to redouble their efforts to attract off-premise customers.” – The NPD Group

“For three months now, the Canadian restaurant industry has improved slowly but steadily versus the prior month,” said Vince Sgabellone, NPD foodservice industry analyst. “Traffic losses improved by just two points in August versus July; but these losses are now less than half of what they were at the height of this crisis in April. In my mind, I will call this a victory for the industry.”

Even with dine-in restrictions being lifted, on-premise dining continues to underperform, with traffic down 65 per cent in August compared to year ago. These steep declines, which are primarily driven by small chains and independents, account for the total industry visit losses. With most full-service restaurants being reliant on on-premise dining, visits to these types of restaurants declined more than twice as much as quick service restaurants, which are more equipped with off-premise services, like drive-through and carry-out.

Digital ordering from restaurants has flattened at 12 per cent of total foodservice traffic, similar to July, but five points below the height in April. Also, for the first time since the pandemic began, delivery orders did not double versus the same month a year ago, increasing instead by a relatively modest 75 per cent.

“With patio season soon coming to a close and the virus beginning to make a resurgence in many regions through September, it may be reasonable to expect that delivery will once again make a comeback through the fall,” Sgabellone said. “Full-service restaurants, in particular, will need to redouble their efforts to attract off-premise customers. Many have begun offering meal kits and cocktail kits for delivery or pickup while others are opening virtual grocery stores to capture a customer base that is cooking more than ever at home. With the holiday season coming up soon, there is still time and opportunity for operators to be a part of the off-premise traffic boom, if they haven’t already joined.”