NPD Group’s David Portalatin said sales are moving in the right direction, but challenges persist as operators navigate a new operating environment. While the verdict is still out on how the recent surge in COVID-19 cases due to the Delta variant will affect the foodservice business, restaurant performance has shown encouraging signs of a recovery. With Americans increasingly getting out of the house, traveling, and feeling more comfortable dining at restaurants, dollar sales at restaurants were up in June compared with pre-pandemic levels. David Portalatin, the foodservice industry advisor for consumer research firm The NPD Group, said restaurant dollar sales were up 8% compared with June 2019. “We’re definitely moving in the right direction,” he said. Sales were up despite customer visits being down 7% compared with June 2019, he added. He attributes that to the fact that consumer behavior changes during the pandemic have led to more group meal occasions and higher check averages across the industry. Behavioral changes have also affected where Americans choose to eat. “We’re definitely seeing the traffic patterns improve, but over the last year or so, the American consumer has learned how to prepare more meals at home,” Portalatin said. “If you look at the grocery sales data, for example, grocery sales are still up double digits versus two years ago.” Indeed, restaurant operators still face a number of challenges in making a full recovery, not the least being the Delta variant driving another surge in COVID cases. For one, the trend toward at-home meal replacement — which had stagnated consumer restaurant visits in the five years prior to the pandemic — continues to benefit the supermarket category. Second, on-premises occasions are still down 30% compared with 2019, putting more pressure on off-premises channels. In addition, the shift to more Americans working from home continues to affect business in urban areas. Portalatin estimates that 58 million people are still working primarily at home, compared with about 5.5 million who did that pre-pandemic. NPD Group expects 15–30 million people to continue working from home on a permanent basis. “I think you will see some normalization, some return to the cities, some return to the central business districts, but we did measure a very big migration away from some of the more densely populated urban areas, and I think some of that will have some permanence to it,” he said. “I think you’re going to see a more permanent shift away from major markets into … different kinds of communities that are smaller, that offer a little more space and flexibility. And this may have an effect on where new restaurants get built in the future.” Watch the interview with Portalatin for a more detailed look at how the restaurant industry is recovering from the COVID-19 pandemic, and how operators should adjust according to consumer behavior changes that accelerated in the past year. – Source: NRN.
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