The Coronavirus Bright Spot?
Imagine a place that has a near-constant flow of people during a period where there is national worry over a spreading virus. One would clearly expect visits to decline for such a location. Yet, the QSR sector, seemingly against all odds, doesn’t appear to have been heavily impacted by wider coronavirus concerns just yet.
QSR Holds Strong
We analyzed nationwide traffic for Starbucks, McDonald’s, Chick-fil-A and Burger King and found that the brands were all seeing strong results. Looking at February visits year-over-year, all of the measured brands have seen growth. Starbucks’s visits were up nearly 6.7% year-over-year with visits coming in 4.3% below the monthly baseline for the period between January 2017 and February 2020. This was well above February 2019 performance, when visits were 11.0% below.
Chick-fil-A saw 14.8% year-over-year February growth, with visits rising to 13.1% above the baseline, well beyond February 2019 when visits were 3.7% below. The same growth held true for McDonald’s and Burger King who saw 5.6% and 2.0% visit growth year-over-year for February.
Fast Food Resiliency
And this wasn’t just the case for February, where much of the month took place without the specter of coronavirus hovering over the US economy. We analyzed the daily traffic from Wednesday, February 26th through Saturday, March 7th in 2020 and compared it to the equivalent period in 2019 - Wednesday, February 27th through Saturday, March 9th. Three of the brands saw year-over-year growth during this 11-day period while Burger King saw a nearly negligible decline.
Chick-fil-A led the way with 11.9% growth continuing the brand’s impressive trend. Starbucks and McDonald’s enjoyed bumps of 4.2% and 2.9% nationwide. And all of this growth happened during the height of coronavirus concerns.
Trend Continues into March
We then expanded the search and focused even more on pure March numbers, expecting that the decline likely took greater hold as the new month progressed.
Amazingly, though, this trend seems to be continuing into March across the sector. We analyzed eight Fast Food and Fast Casual brands to analyze whether year over year traffic was growing or slowing down. And the trend seems to be holding.
Here too, most of the brands are seeing year over year growth, and those with losses saw a stronger start to March 2020 that might have been expected with declines shrinking.
Reinforcing this continued strength, when we analyzed the change in traffic between the last week of February and the first week of March, we found that only two brands have seen that metric drop over the previous two years. Usually, the brands have seen a dip in traffic from the last week of February to the first week of March, but four of the eight saw those fortunes turn in 2020. Two others saw increases on previous numbers, and only two saw decreases.
The two companies that did see negative results were both in the sitdown Fast Casual space, where concerns over the spread of a virus may be having a greater impact. The indication that a longer stay in a location could increase concerns makes sense but also points to clear mechanisms to help slow down the decline and perhaps, even drive growth.
These jumps show signs of a resilient economy in the face of health concerns that are making headlines on a daily basis. It also runs directly counter to the notion that the entire retail economy is heading for a major downturn.
The data does not mean that everything will stay status quo with ongoing growth. It also doesn’t mean that there will be no negative effects should the virus continue to have an impact over the coming weeks and months. However, it does signal the absolute need to refine our thinking.
Coronavirus is not going to have a single blanket impact on all aspects of the economy or even the retail economy or food sector more specifically. Different industries and sections of industries will feel the impact in different ways, and this likely means there are those that won’t feel a change at all.
Could QSR be one of the sectors to see a surge during the coronavirus period? Visit Placer.ai to find out.