COVID-19 Impact Analysis Series
Article Two: Foot Traffic in the Restaurants
What changes in visit traffic can restaurants expect in the coming few weeks?
Authors: Anil Raparla, Shubham Goyal (March 24, 2020)
THIS COVID-19 impact analysis series designed by Punchh’s data team aims at sharing the real-time insight we have discovered when we study our consumer behavior data set. In this second article, we provide a quantitative estimate of the changes in visit traffic (offline and online) that restaurants can expect in the coming few weeks.
When WHO declared COVID-19 as a pandemic on Mar-11, 2020, it was inevitable that the customer visit behavior at restaurants was going to change significantly. But how big will the impact be?
Before we get into it, let’s look at the trend of visits at 95,000 stores across the country in the last few weeks. (Visits comprise all the transactions made at the store and through online orders).
It can be seen that, from the second week of March, the total visits across the country started declining. The biggest decline is seen when the latest week is compared with the week before. Here are some numbers.
In the coming weeks, how much decline will the industry experience when compared to a similar period in the month before the outbreak?
To address this question, we looked at Seattle, one of the first cities to have witnessed the outbreak, with confirmed cases steadily increasing from Mar-01, 2020. We picked a random sample of 25 stores in Seattle and 250 in the rest of the nation and compared the cumulative visits at these two location groups from the Feb-12 to the Mar-18, with Mar-01 as the event date.
Using Difference in differences, a statistical technique used in quantitative research, the net decline in daily visits pre- and post-event came out to be 24.3%. Note: we have established parallelity in daily trends, a pre-requisite for the method to be applicable.
With the rest of the nation following the trajectory of Seattle, a decline of at least a 24.5% decline in footfall in the coming weeks is a reasonable benchmark for restaurants to consider while planning inventory and operations in these times of uncertainty.
