Hi everybody,
I am happy to share a recently finalized research that applies SafeGraph foot traffic data from the Washington metropolitan area to understand the evolving trends of restaurant service demand through the COVID-19 pandemic. The preprint of our paper can be found at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3934589.
The outbreak of the COVID-19 pandemic has caused unprecedented damage to restaurant businesses, especially for indoor dining services, due to the widespread fear of coronavirus exposure. In contrast, the online food ordering and delivery services, led by DoorDash, Grubhub, and Uber Eats, filled in the vacancy and achieved explosive growth. This research sheds light on both the magnitudinal and structural changes in restaurant service demand.
We first analyzed the aggregate foot traffic volumes to reveal the disruptions to restaurant services across the different stages of the pandemic. Then, a probabilistic learning model was proposed to decompose the aggregate foot traffic by service modes into those for dine-in and takeout, respectively. The transitions in demand structures were identified for restaurants of various service types, price levels, and locations. (Note: Takeout traffic in this paper considers those visits relevant to customers who order online or offline and then either choose to take out themselves or have someone else pick up meals on their behalf.)
Takeaways:
- In general, our results evidence that the overall restaurant demand still drifted around half of the pre-pandemic level in the Washington metropolitan area by June 2021, far from a complete recovery, one year after the mandatory lockdown was ended. Meanwhile, given their comparative advantages in takeout channels, limited-service and budget restaurants were hit less severely than full-service counterparts. For the urban-rural division, restaurants in exurban/rural areas top the race in recovery, followed by those in suburban and urban areas.
- Before the pandemic, the percentage of takeout traffic remained fairly stable around 50% to 60% of the total traffic, as opposed to the growing shares for food delivery services. The takeout portion has converged to a slightly higher level at 65% during the pandemic. With the retreat of epidemic severity, the trend suggests that customers’ preference regarding dine-in and takeout was not fundamentally overturned.
- The separate trends by restaurant types show dichotomous paths of recovery in demand structure. After the termination of mandatory lockdown, the percentage of takeout visits at full-service restaurants gradually trended downward toward the pre-pandemic level. In contrast, limited-service restaurants and drinking bars observe a mild upward trend in the share of takeout services, possibly due to the popularization of online food ordering and delivery.
- The comparative changes of the two service modes (dine-in versus takeout) exhibit conspicuous heterogeneity among different regions along the path of recovery. In the exurban areas, the demand for dine-in services hesitated around half of the pre-pandemic level, whereas the takeout traffic almost returned fully back to normal. But in the urban areas, there lacks a clear sign of either mode advancing faster in the recovery.
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