Revenue Management Solutions today released its analysis of US quick-service restaurant (QSR) performance for 2021. Overall, traffic continued its post-pandemic decline, but the global data solutions provider believes double-digit increases in average check will remain — and demonstrate a fundamental change in consumer behavior.
To accurately assess the underlying trends of restaurant performance, RMS compared 2021 sales and traffic to pre-pandemic 2019 data. On average, sales were up 8.1% over 2019, and average check increased by a remarkable 22.9%. Traffic, on the other hand, remains low, down 12% as compared to 2019, and continued a negative trend in the second half of the year. Surprisingly, 2021 traffic also was even with or slightly lower when compared to the highly volatile 2020.
“Consumer habits are fundamentally different,” notes RMS Director of Research and Consumer Analytics Francois Acerra. “Traffic is down, but the relative increases in average check indicate that QSRs haven’t lost customer segments. Instead, we believe that quick-service restaurant customers have permanently changed their behaviors — visiting less frequently than pre-pandemic yet spending more per visit.”
RMS is among the only restaurant data providers to deconstruct average check and the story it tells about how consumers dine now. In its estimation, sales and traffic data still matter, but average spend has emerged as a leading indicator for overall performance.
“Given the intense pressure on margins caused by rising commodity prices and labor shortages, analysts may give credit to price increases for the overall rise in average check,” said Acerra. “But when we dug deeper into the numbers, it’s clear that a behavior change is also driving up average check. In short, consumers are ordering more food, and for larger parties. We’ve noticed that the increase in basket size is partly due to more guests being on the same check and that, in fact, the share of single-party orders has declined.”
In 2021, the quantity per transaction — or how many items were purchased in a single order — was up 14.3% compared to 2019. Compare that to average net price, which was up 7.5%, and it’s clear that net sales performance was sustained by average check growth.
“As QSRs make it increasingly easier to order off-premise with the rollouts of mobile applications and loyalty programs, they provide a convenience to customers that may take the sting out of higher prices,” said Acerra.
This is true for efficient drive-thrus as well, notes RMS. In the company’s November 2021 survey of more than 800 US restaurant consumers, 76% reported making a restaurant drive-thru visit at least once a week, compared to 63% that reported dining in. Delivery, which has become a flashpoint for customers and operators, has steadily decreased since its peak in 2020. Just 49% of survey respondents reported using delivery at least once per week in November 2021, a steady decline from 60% in November 2020.
“Wait times, poor customer service and order inaccuracy — not price — are being cited in our surveys as the top reasons for dissatisfaction,” said Acerra. “QSRs that can overcome challenges and deliver meals quickly, accurately and with a smile will deliver value to customers and potentially outweigh necessary price increases.”
RMS has meticulously monitored consumer sentiment and behavior since March 2020, supplementing its 25-year experience and rich data insights with quarterly consumer surveys, university-sponsored research and anecdotal information. For more data insights and 2022 predictions, visit revenuemanage.com.
About Revenue Management Solutions
Now more than ever, Revenue Management Solutions (RMS) is committed to supporting restaurants through these ever-changing times. Today, more than 50 major brands in 40-plus countries trust RMS. Its data-driven analytics and tech-enabled solutions are designed to optimize sales, menus and a brand’s financial health. RMS provides actionable insights to more than 100,000 restaurant locations worldwide to help them make informed business decisions that drive profitability and combat inflation and increasing wages. The company holds five US patents on menu pricing and customer segmentation and supports ongoing academic research efforts. For more information on how RMS helps its clients, visit www.revenuemanage.com.