- First-half 2023 traffic is down by nearly 20% compared to 2019
- Average check increases of more than 40% contribute to higher sales
Revenue Management Solutions, a world leader in addressing profitability challenges for the restaurant industry, has unveiled groundbreaking insights with a comparative analysis of current Quick-Service Restaurant (QSR) performance with pre-pandemic levels.
RMS compared sales, traffic and average check in the first halves of 2022 and 2023 to the same period in 2019, shedding light on how the extreme market forces of the past three years have affected the industry.
“Most of the industry compares month-over-month or year-over-year data. For example, August 2023 traffic was down just half a percent compared to 2022,” said RMS Senior Vice President Richard Delvallée. “This approach reveals gradual changes but not the seismic shifts our comparisons indicate. The landscape has indeed changed for QSR and its customer base.”
Not back to normal
Standard indices suggest consumers have resumed pre-pandemic behavior. However, the RMS analysis found otherwise. Here are some key observations:
- QSR traffic is down nearly 20% (18.4%) when comparing June 2023 to June 2019, with traffic consistently trending downward since January 2022, when it was just 15.5% lower than 2019.
- Overall, QSR average check is 40% higher than pre-pandemic. Average check grew by 51% in specific dayparts.
- Consumer behavior has shifted permanently away from QSR dine-in. The channel lost nearly half of overall traffic in the past two years.
- Lunch traffic is consistently down by about 20%, likely due to hybrid work. Similarly, breakfast traffic took a nosedive in 2023 compared to last year.
Performance by channel
Performance is not created equal when comparing QSR channels. RMS’ analysis reveals a drastic shift towards drive-thru long after dining rooms reopened.
- Drive-thru: Traffic is down an average of 12% in 2023 compared to 2019. Net sales remain positive (+25%) due to steep increases in average check, which is up 42% for the year — jumping as high as 49.5% in January 2023. Drive-thru accounts for 2/3 of QSR revenue.
- Dine-in: Across 2023, dine-in traffic was down an average of 47%, finishing Q2 at a 43.6% loss. Average check growth was more conservative — up 36%, keeping net sales in negative territory (-25%).
- Takeout: Traffic is down an average of 36% in 2023 compared to 2019, with 42% average check growth and net sales down nearly 10%.
“Pandemic dine-in restrictions forced a complete halt to dine-in,” said Delvallée. “As restrictions lifted, labor shortages forced operators to limit in-store service. Now, three years out, the convenience-driven behaviors adopted by guests remain and are being reinforced by improved drive-thru technology and operations.”
Performance by daypart
Daypart analysis further suggests dining behavior has not returned to “normal.” Average check growth of nearly 50% (47.5%) kept net sales positive for all dayparts, but traffic is significantly down.
- Breakfast: Traffic was down an average of 21.5% in 2023. Breakfast performed much better in 2022, when decreases were just 8% lower than in pre-pandemic 2019. Net sales remain positive (+16%).
- Lunch: Traffic is down an average of 18% for 2023 compared to 2019. Net sales are up an average of 18%, driven by a 45% growth in average check.
- Dinner: Traffic remained most stable but still experienced a decrease — down 15% across the first half of 2023. Net sales were up an average of 25%.
Upcoming Pricing Pressure
Price increases have been pivotal in sustaining QSR revenue, but how much can customers bear before breaking?
When RMS surveyed over 1,000 US consumers, 31% reported spending less at restaurants. Among those consuming less, 1 in 2 are doing so by ordering less frequently from restaurants.
“Going into the last quarter of 2023, operators have to be very surgical in their pricing strategy,” notes Delvallée. “This data will undoubtedly help restaurants adapt to the new landscape and enter 2024 stronger.”
About Revenue Management Solutions
Revenue Management Solutions specializes in delivering actionable insights and providing solutions that drive sales, streamline costs and maximize profitability. With a data-driven approach, RMS supports iconic brands and emerging concepts in over 40 countries, spanning more than 100,000 locations. For more information on how RMS helps executives and finance professionals in the restaurant industry overcome profitability challenges, visit revenuemanage.com.
Center Reach Communications