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QSR Bounceback

Ethan Chernofsky
April 16, 2020
QSR Bounceback

There are few industries that have taken the same offline hit as the QSR sector. With many closing in-store dining options as early as mid-March, the wider industry saw a precipitous drop in visits shortly thereafter.

We dug into the sector to analyze its performance in order to understand how it has been affected and what its long term opportunity is for a fast turnaround.

Hard Hit

The wider Fast Food sector felt a strong negative impact from the spread of coronavirus. Brands across the space watched their traffic drop significantly after strong visit numbers in January and February. Chick-fil-A had already enjoyed two months with over 20% year-over-year growth, while Chipotle was continuing its strong rebound with 14.6% and 24.5% visitor growth in January and February respectively. Heavyweights like McDonald’s, Burger King and Taco Bell were also enjoying strong starts to the year. 

Yet, March damaged that effort significantly with all but one of the brands analyzed seeing year-over-year declines of more than 30%.

When and How the Downturn Began Matters

Yet, like with other industries, the timing of the downturn is important. Visits not only saw growth in the last week of February and the first week of March but incredibly high growth. The group analyzed averaged a 10% increase in visits during the second week of March year-over-year with Chick-fil-A leading the way with a jump of over 18%.

And looking at an industry leader like Chick-fil-A is indeed demonstrative. The brand - known for staying closed on Sundays - saw the two Saturdays prior to shutting dining rooms come in as the highest traffic days nationwide since the start of 2019. Even more, when the decision to close dine-in came, the blow came felt swiftly. Visits went from 24.1% above the baseline on Saturday the 14th to 37.7% below on Monday the 16th. From here, visits found a bottom that has continued through early April. Their audience didn’t want to stop coming, the brand was simply trying to be responsible during a period that called for social distancing.

McDonald’s also experienced a sharp and precipitous decline following incredibly strong heights in late February and early March. As with Chick-fil-A, visits the last Saturday of February and the first Saturday of March were among the best performing days over the period beginning in January 2019. Here too, once dine-in options began to close, visits quickly plummeted.

The Takeaway?

The takeaway here is very simple. Americans love Fast Food. The likeliest explanation for the high peak prior to shutdowns nationwide is that people turned to QSR either for fear it would be harder to get or for comfort in a crazy period. And both of these factors bode well for the return of the QSR sector. Additionally, the fact that a period of economic uncertainty is nearly guaranteed for the post-coronavirus period also supports the Fast Food model.

Fast Food restaurants offer high value, high comfort, and low-cost meals, something that becomes increasingly critical during times of economic downturn. The combination of these factors position the top brands to outperform in the post-coronavirus period. 

Finally, the existence of strong delivery, drive-thru and takeout systems can help these brands push through this difficult period while mitigating losses even amid drops in in-store sales. Even with the significant decline, McDonald’s was still able to eke out positive same-store numbers in March according to recently announced earnings.


The lingering desire for Fast Food - including visit peaks ahead of dine-in closures - alongside a future economic situation that emphasizes the value orientation of their offering positions the sector to rebound quickly. Additionally, the existence of some of its revenue channels - including delivery and drive-thru - should limit the ultimate impact.

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