QSR Reckoning

With earnings coming for Starbucks (SBUX), Restaurant Brands International (QSR), and Yum Brands (YUM), we dove into their Q1 data to see how they were performing pre-coronavirus and analyze the impact on their overall offline health.


Looking at nationwide data for Starbucks from January 2018 through March 2020 shows a strong upward trend. January visits in 2020 were 5.5% above the baseline for the period, with visits up 6.3% year-over-year, and February visits were up 12.4% year over year. While there was a day longer in February 2020, the growth is still exceptional. 

Expectedly, March hit very hard seeing visits drop 30.2% below the baseline, a decrease of over 36% year over year. 

However, even this drop was mitigated by a stronger than normal performance in early March. In fact, the first week of March 2020 saw visits rise 15.4% above the weekly baseline for the period, the best weekly performance in Q1 for the entire period. The intense spike in visits coming before government and chain level restrictions shows a strong indication that consumers were truly concerned about missing out on their favorite barista brand.

The combination of a strong start to Q1 and even a visit peak in the week right before COVID-19 restrictions were implemented should give confidence that Starbucks could be among the brands to rebound fastest. And this is only reinforced by an added strength coming from its various means of delivering products including takeaway and drive-thru. 

RBI’s Giants

Looking at the US performance for the three companies under Restaurant Brands International showed equally exciting potential. While Burger King and Tim Hortons saw Q1 visit decreases of 7.0% and 10.3% year-over-year, this was heavily driven by a March defined by COVID-19. And even with the pandemic, the chicken sandwich inspired growth of Popeyes was so strong in January, February, and early March that the brand still enjoyed a massive 40.0% visit jump overall for the quarter year over year.

And looking at year-over-year change for just January and February only makes the trio’s strong performance more clear. All three saw growth with Popeyes leading the way with a near 60% year-over-year jump in those months while Burger King and Tim Hortons saw increases of 6.7% and 5.6% respectively. The impact of Tim Hortons growth here is crucial, as it had been the weakest of the bunch in previous quarters and years. If the coffee chain can continue to improve its US in-store performance over the coming months, RBI’s big three may see huge jumps.

YUM Brands

YUM Brands has their own big three headlined by Taco Bell, KFC and Pizza Hut, and here too the signs were positive. Taco Bell saw monthly visits rise 1.9% and 1.6% above the baseline in January and February 2020 respectively for the period from January 2018 through March 2020. This amounted to year-over-year visit growth of 8.0% in January and 9.9% in February. 

KFC saw a similar trend with year-over-year visit growth of 3.6% in January and 9.2% in February. Yet, both brands saw their visits plummet with the onset of COVID-19 and the need for both government and self-imposed restrictions.

Of the brands analyzed, only Pizza Hut saw mixed results with January visits down 0.9% year-over-year and February visits up just 0.7% even with an added day. Yet, the wider trend among YUM companies held, visits to Fast Food companies were on the rise heading into the pandemic displaying the strength of these brands and the wider sector.

Wider Takeaways – Fast Food Strength

The Fast Food brands analyzed saw visits hold strong for an exceptionally long period considering the wider COVID-19 concerns. And there are many reasons to believe that once restrictions are lifted, the wider space will be among those best-positioned to succeed

And this provides critical context when analyzing these brands in the coming days and weeks. Whether or not delivery, drive-thru and takeaway were able to fully mitigate COVID-19 related losses, there are few companies that have indicated their ‘bouncebackability’ to the same extent as these brands. The combination of strong growth heading into the crisis, options for mitigating losses through delivery and takeaway during, and a value proposition well suited for the coming economic uncertainty make these companies among the most interesting to watch.

How will the top Fast Food brands bounce back? Visit Placer.ai to find out.

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