A steady rebound in restaurant consumer transactionshas hit a six-week wall as COVID-19 surges and accompanyingreopening rollbacks stall any recovery, according to The NPD GroupInc.

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Since the second week of June,major restaurant chain customer transactions fell between -11% and-14% when compared to last year, according to NPD.Its findings werebased on chain-specific transactions and share trends for 75 quickservice, fast casual, midscale and casual dining chains, whichrepresents 53% of U.S. commercial restaurant traffic.

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To be sure, NPD did note earlieran steady improvement in major restaurant customer transactionsstretching from the last week of April through the second week ofJune. By the week ending July 12, consumer transactions were down-14% compared to a year ago. The following week ending on July 19saw a slight improvement with transactions only down -12% comparedto a year ago.

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In the week ending July 19, quickservice restaurant chains were responsible for improving customertransaction figures from the previous week, NPD wrote. Quickservice restaurant chains' transactions were only down -11%year-over-year that week. While full service restaurants'transactions were down -27% year-over-year, those figureswould be in a worse position without full service restaurants'significant shift to off-premises services, NPD noted. In June,full service restaurants' off-premises traffic grew 91% compared toa year ago and on-premises traffic declined -62%.

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The NPD noted some full servicerestaurants aren't waiting for mandates and coronavirus-relatedreluctance to ease before shifting service delivery.

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"Certainly full servicerestaurants need to recover their lost on-premises business sincethat will always be their main source of volume," said NPD foodindustry adviser David Portalatin in a prepared statement. "But, Iwouldn't be surprised to see new casual dining models emerge thatare designed to optimize off-premises capabilities for the longterm."

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Capacity restrictions aresignificant factors driving the decline in customer transactions,NPD wrote. In the week ending July 19, 78% of restaurants werebased in areas that permitted on-premises dining but with varyingcapacity restrictions. Notably, California is home to 13% of thecountry's restaurants but is currently prohibiting on-premisesdining, NPD added.

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For most US restaurants, they areoperating "well below" normal capacities partly fueled by thepandemic and difficulty attracting labor, NPD wrote. But consumers'spending habits will dictate how restaurants operate.

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"The 'recovery' phase will thentell us whether the industry can recapture enough customer trafficto get back to the pre-COVID baseline, or whether the new normalwill reflect a reset where consumers prepare more meals in theirhome kitchens for a longer term," Portalatin said.

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Victoria Hudgins

I am a reporter for Legaltech News where I cover data privacy, cybersecurity and technology's impact on the business and practice of law.