What you need to know

COVID-19 has disproportionately impacted the full-service restaurant segment due to rolling dine-in bans and more limited off-premise options and higher price points compared to the limited-service segment. As a result, recovering to prepandemic sales levels will take some time. The biggest opportunities to improve sales lie in creating value through convenience, safety, and experience. This means curating unique off-premise offerings (ie takeout, delivery), expanding beyond core dayparts, and ensuring an enjoyable and safe dining experience both on premise and off. Targeting current full-service restaurant diners will be vital to future success as they remain an engaged group, despite the pandemic's negative effects.

Key issues covered in this Report

  • The impact of COVID-19 on consumer behavior and the full-service restaurant market.

  • How a recession will impact consumer spending at full-service restaurants and how soon the market is expected to recover to prepandemic levels.

  • The importance of full-service restaurants investing in off-premise offerings (eg ghost kitchens, takeout/delivery, meal kits, drive-thrus, etc) and off-peak occasions to maintain relevancy during the pandemic and beyond.

  • The biggest motivators and barriers impacting consumer behavior at full-service restaurants as well as the biggest opportunities for driving future visitation.

Definition

This Report covers consumers’ attitudes and behaviors surrounding FSRs (full-service restaurants). FSRs are defined by having a front-of-house staff (ie waiters, host). FSRs include the following restaurant segments:

  • Family midscale restaurants (used interchangeably with family dining restaurants) offer the lowest check size of any FSR. A majority of midscales do not serve alcohol, though some may have a limited alcohol selection (just beer and wine). Midscale examples include Denny’s, Cracker Barrel and IHOP. Buffet restaurants are classified as midscale restaurants (eg Golden Corral).

  • Casual dining restaurants represent the largest segment of the FSR market. Casual dining restaurants have higher pricing than family/midscales but lower than fine dining, and they offer a full bar. Examples include Chili’s, Olive Garden and Outback Steakhouse.

  • Fine dining restaurants have the highest price point of all FSRs.

Note: As casual dining restaurant chains represent a large share of the total FSR market, this Report will provide an in-depth analysis of casual dining chains.

This Report builds off of analysis presented in Full Service Restaurants – US, February 2020.

COVID-19: FSR context

The first COVID-19 case was confirmed in the US in January 2020. On March 11, the World Health Organization declared COVID-19 a global health pandemic, and on March 13, former President Trump declared a national emergency in the US.

Across the US, state-level stay-at-home orders rolled out throughout the months of March and April and remained in place through May, and in some cases June. During this time, referred to as lockdown, nonessential businesses and school districts across the nation closed or shifted to remote operations, which meant restaurants suspended dine-in service and only sold foods and beverages for takeout or delivery.

During re-emergence, all 50 states have relaxed stay-at-home orders and allowed businesses to operate with varying levels of social distancing measures in place. The continued spread of COVID-19 infections has driven some states to slow down or reverse course on reopening plans, including the resuspension of dine-in service in select cities and states in Fall 2020. Mintel anticipates the US will remain in a state of flux through 2021, until a vaccine is widely available.

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