Table of Contents
Overview
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- What you need to know
- Key issues covered in this Report
- Definition
Executive Summary
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- Top takeaways
- Market overview
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- Figure 1: Total US revenues and forecasted sales ranges of restaurants and eating places*, at current prices, 2014-24
- Impact of COVID-19 on restaurant ordering, takeout and delivery
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- Figure 2: Short-, medium- and long term impact of COVID-19 on restaurant ordering, takeout and delivery, July 2020
- The challenges
- The recession slows down delivery business
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- Figure 3: Restaurant delivery, September 2019 and May 2020
- Core delivery consumers driving demand for grocery delivery
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- Figure 4: Restaurant vs grocery delivery attitudes, by generation, May 2020
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- Figure 5: Coronavirus lifestyle changes, April-July 2020
- Operators need to convert young consumers into restaurant-direct users
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- Figure 6: NET any third-party use, by generation, May 2020
- The opportunities
- Increased online ordering gives the gift of data
- Bad press for third-party companies means more opportunity to support restaurant-direct options
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- Figure 7: Third-party company fee attitudes, May 2020
- Increased work from home offers breakfast and lunch delivery opportunity
- Struggling FSRs should cater to off-premise celebrations
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- Figure 8: Restaurant delivery interest for celebrations – NET any restaurant segment, May 2020
- Alcohol delivery can help boost profits
The Market – What You Need to Know
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- Restaurant takeout and delivery transforms into primary point of sale overnight
- High unemployment rates during recession hurt delivery business
- Legislation lassos third-party companies
Market Size and Forecast
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- Figure 9: Total US revenues and forecast sales ranges of restaurants and eating places*, at current prices, 2014-24
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Market Breakdown
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- Off-premise business will accelerate LSRs’ market share growth
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- Figure 10: Total US revenues and forecast sales ranges of restaurants and eating places*, by segment, at current prices, 2014-24
Market Perspective
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- Grocery delivery surges in wake of COVID-19
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- Figure 11: Coronavirus lifestyle changes, April-July 2020
Market Factors
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- Concerns over catching COVID-19 will drive off-premise business
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- Figure 12: COVID-19 exposure concern, March-July 2020
- Figure 13: Future activities, April-July 2020
- Dine-in restrictions will also continue to drive off-premise business
- ADA compliance
- Bills emerge to regulate third-party companies
- Menu labeling laws ease up during COVID-19
- Spiking unemployment will curb all restaurant spend, including delivery
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- Figure 14: Unemployment rates, 2008-June 2020
- Increased work from home offers breakfast and lunch off-premise opportunity
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- Figure 15: Parental employment status during COVID-19, June 2020
Key Trends – What You Need to Know
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- Third-party delivery turmoil is center stage during the pandemic
- Crisis breeds innovation: contactless off-premise solutions, alcohol delivery
- Off-premise-focused prototypes speed up growth exponentially
Third-Party Delivery Company Advertising Spend
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- Uber Eats’ ad spend gives DoorDash a run for its money in 2020
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- Figure 16: Online advertising spend volume for top four third-party delivery companies, October 15, 2019-June 16, 2020
- Figure 17: Monthly online advertising spend for top four third-party delivery companies, October 15, 2019-June 16, 2020
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- Figure 18: Uber Eats’ waived delivery fee Facebook ad, April 2020
- Figure 19: Uber Eats’ BOGO Facebook ad, March 2020
What’s Working?
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- During height of COVID-19 pandemic precautions, all restaurants became to-go restaurants
- Contactless off-premise solutions proliferate
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- Figure 20: Chick-fil-A email, “A Contactless Experience!” March 24, 2020
- Figure 21: Papa John’s email, “No Contact Delivery Is Here,” March 24, 2020
- Curbside pickup rapidly expands
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- Figure 22: Panera Bread’s email, “Order for Drive-Up & Pick Up Curbside,” April 17, 2020
- Delivery-friendly foods are in demand
- Heat-and-eat options on the rise
What’s Struggling?
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- Recession hurts delivery business
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- Figure 23: Restaurant delivery, September 2019 and May 2020
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- Figure 24: Restaurant off-premise attitudes, by gender, May 2020
- Third-party app tensions rise between operators, consumers
What’s Next?
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- Third-party consolidation, restaurant self-delivery
- Alcohol to go
- More mobile and ghost kitchens
The Consumer – What You Need to Know
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- Restaurant pickup service jumps as dine-in service nosedives
- Overall delivery use is down, but third-party use is up
- Online ordering adoption is most likely to outlast COVID-19
Restaurant Ordering, Pickup and Delivery
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- Off-premise purchases don’t make up for dine-in losses during COVID-19
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- Figure 25: Restaurant ordering, pickup and delivery – NETS, June 2016, September 2018, September 2019 and May 2020
- Pickup service is the most popular way to order food during COVID-19
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- Figure 26: Restaurant ordering, pickup and delivery, September 2019 and May 2020
- Gen Z drives delivery growth
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- Figure 27: Restaurant ordering, pickup and delivery, by generation, May 2020
- White consumers are most likely to order from restaurants directly
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- Figure 28: Restaurant ordering, pickup and delivery, by race and Hispanic origin, May 2020
- About a fifth of digital delivery orders were spurred by COVID-19
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- Figure 29: Restaurant delivery ordering online first-time status, May 2020
- Third-party ordering is even higher than digital delivery services overall due to COVID-19
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- Figure 30: Restaurant third-party ordering first-time status, May 2020
- Curbside is most prevalent method of restaurant pickup
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- Figure 31: Restaurant curbside pickup, May 2020
Delivery Frequency, Motivations and Barriers
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- Half of delivery users are ordering delivery more frequently than usual
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- Figure 32: Change in delivery frequency, May 2020
- Men aged 35-54 are driving increased delivery frequency
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- Figure 33: Change in delivery frequency, by gender and age, May 2020
- White and Hispanic consumers are driving increased delivery orders
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- Figure 34: Change in delivery frequency, by race and Hispanic origin, May 2020
- Convenience remains top delivery motivator during COVID-19
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- Figure 35: Restaurant delivery motivators – NET any rank, May 2020
- Older consumers are ordering more delivery to support local restaurants
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- Figure 36: Restaurant delivery motivators – NET any rank, by age, May 2020
- Concerns of catching COVID-19 are leading deterrents to delivery service
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- Figure 37: Restaurant delivery barriers – NET any rank, May 2020
Pickup Frequency, Motivations and Barriers
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- Pickup frequency has not increased quite as much as delivery frequency during COVID-19
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- Figure 38: Change in pickup frequency, May 2020
- Men aged 35+ drive increased pickup frequency
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- Figure 39: Change in pickup frequency, by gender and age, May 2020
- White consumers are much more likely than counterparts to report increased pickup
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- Figure 40: Change in pickup frequency, by race and Hispanic origin, May 2020
- Consumers are ordering more pickup to support restaurants
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- Figure 41: Restaurant pickup motivators – NET any rank, May 2020
- Young men are ordering more restaurant pickup for a convenient treat
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- Figure 42: Restaurant pickup motivators – NET any rank, by gender and age, May 2020
- Similar to delivery, top pickup deterrents are fears of catching COVID-19
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- Figure 43: Restaurant pickup barriers – NET any rank, May 2020
Delivery Interest by Occasion and Segment
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- Dinner and lunch are top of mind for delivery occasions
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- Figure 44: Delivery interest by occasion – NET any restaurant segment, May 2020
- Gen Z drives delivery service in off-peak dayparts
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- Figure 45: Delivery interest by occasion – NET any restaurant segment, by generation, May 2020
- Black consumers are most interested in morning delivery service
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- Figure 46: IHOP email, “Enjoy the 4th Weekend and Get Late Night Delivery from IHOP,” July 3, 2020
- Figure 47: Delivery interest by occasion – NET any restaurant segment, by race and Hispanic origin, May 2020
- Lunch delivery is most top-of-mind for LSRs, while dinner is most top-of-mind for sit-down restaurants
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- Figure 48: Delivery interest by occasion and segment, May 2020
- Figure 49: Email from Red Lobster, “A Letter from CEO Kim Lopdrup about Mother’s Day,” May 12, 2020
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- Figure 50: Panera Bread’s email, “Good Eating All Day with Free Delivery, Too!” May 15, 2020
- Young, Black and Hispanic consumers drive fast food delivery business
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- Figure 51: Delivery interest for fast food restaurant segment – NET any occasion, by select demographics, May 2020
Off-Premise Behaviors
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- Online ordering adoption has longest lasting potential after COVID-19
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- Figure 52: Off-premise behaviors, May 2020
- Older consumers are the most excited to dine out, but they’re also the most unlikely to do so until it’s safe
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- Figure 53: Off-premise behaviors, by generation, May 2020
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- Figure 54: Future activities, by generation, June 2020
- Most first-time online delivery users will not continue using the service post COVID-19
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- Figure 55: Off-premise behaviors, by restaurant delivery ordering online first-time status, May 2020
- Third-party delivery first-timers are more likely than regular online delivery first-timers to continue using delivery
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- Figure 56: Restaurant off-premise behaviors, by third-party ordering first-time status, May 2020
Off-Premise Attitudes
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- Delivery service won’t be restaurants’ silver bullet during the pandemic
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- Figure 57: Off-premise attitudes part I, May 2020
- Figure 58: Off-premise attitudes part II, May 2020
- Men are more willing to order delivery during recession, pay third-party delivery fees
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- Figure 59: Off-premise attitudes, by gender, May 2020
- Grocery delivery service is greatest threat among young consumers
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- Figure 60: Restaurant off-premise attitudes, by generation, May 2020
- Consumers of color demand more delivery innovation
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- Figure 61: Restaurant off-premise attitudes, by race and Hispanic origin, May 2020
- Curbside pickup users want the service to be contactless
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- Figure 62: Restaurant off-premise attitudes, by curbside pickup usage status, May 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Forecast
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 63: Total US revenues and forecasted sales ranges of restaurants and eating places*, by segment, at inflation-adjusted prices, 2014-24
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Appendix – The Consumer
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- Figure 64: Restaurant third-party ordering first-time status, by gender, May 2020
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- Figure 65: Restaurant delivery ordering online first-time status, by gender, May 2020
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