Dive Brief:

• A new report from The NPD Group finds the rate of restaurant traffic and dollar declines for August has eased a bit from June and July, down by 10% and 9%, respectively, compared to the year-ago period. These improvements come as consumers grow more comfortable dining out, NPD food industry advisor David Portalatin said in a press release.
• The NPD Group finds slightly less than 25% of restaurants were under restrictions for on-premise dining in August, and on-premise visits have improved every month since April, as those restrictions have gradually lifted throughout the country. The research also shows increased dine-in visits may have slightly cannibalized digital orders, which generated 17% of occasions in August, compared to 20% of occasions in April.
• There are few major municipalities left that have completely barred indoor dining and, as more jurisdictions increase their capacities, traffic should continue to show improvement as consumers' pent-up demand for dining out remains high. A survey conducted earlier this month by the National Restaurant Association, for example, shows 47% of American consumers are not dining out as frequently as they would like.

Dive Insight:

Plenty of restaurants have scrambled to better accommodate their restaurants for more dine-in guests, including by expanding outdoor seating. However, any on-premise traffic improvements could be negatively impacted as fall and winter weather set in.

Restaurants in cold weather markets could continue to entice consumers toward dine-in by offering adult-only parties, which represented 63% of all restaurant occasions in August, according to NPD. Parties with kids represented 37% of occasions by comparison. Offering socially distanced options for small groups may be a comfortable strategy for consumers, as infection levels hold steady or climb across the country, and experts worry a second wave could soon emerge. Hosting private dining groups, rather than multiple socially distanced parties, could also ease anxiety following the CDC's recent finding that dining out increases the risk of COVID-19 exposure more than other activities.

Despite such seating efforts and this gradual return to dine-in service, research from Technomic emailed to Restaurant Dive shows consumers continue to prefer off-premise channels. Sixty-eight percent have visited the drive-thru; 63% have ordered takeout; 48% have ordered curbside pickup; 45% have ordered third-party delivery; and 45% have ordered direct delivery. Comparatively, 41% of consumers say they have dined indoors and 38% said they have eaten at a restaurant outdoors.

If preference for off-premise options continues through cooler months or a potential second wave, it may not be all bad news for restaurants. More consumers have downloaded apps and ordered digitally for delivery and curbside pickup during the pandemic — delivery spend is up 173% year-over-year as of July 30, according to Cardlytics' latest State of Spend Report. Still, this channel poses challenges if a restaurant is partnering with a third-party delivery provider and is subject to high commission fees — transactions that could weaken sales if on-premise spending drops off.