For Large Restaurant Brands, 2021 Was Better Than Normal  

2021 was a good year for major restaurant chains, not only in contrast to the devastating year before, but also by pre-pandemic standards.

The rapid innovation of the previous year, increasing off-premise availability and upgrading digital platforms allowed restaurants to continue to benefit from elevated digital ordering even as consumer mobility increased, and diners satisfied their pent-up demand for on-premise experiences.

Quick service brands enjoyed a significant boost relative to their pre-pandemic performance.

McDonald’s, for instance, reported in late October that global comparable sales in the third quarter were up 10% on a two-year basis, while competitor Restaurant Brands International, parent company of Burger King and Tim Hortons, among others, saw systemwide sales grow 6% from 2019. Moreover, Taco Bell saw systemwide sales for the first nine months of the year increase 15% on a two-year stack, KFC saw a 13% increase, and Pizza Hut saw a modest 1% increase.  

The increase makes sense, given how much of these brands’ business comes from those digital sales that have increased dramatically since the start of the pandemic. According to data from PYMNTS and Paytronix’s 2021 Restaurant Readiness Index, 55% of chain quick service restaurants’ (QSRs’) sales are generated online, while 39% of sales at chain restaurants with table service come in through digital channels.  

For more: QSRs Lagging Loyalty-Reward Investment Hurts Innovation and Sales 

Still, 39% is a large portion in its own right, and restaurants with table service have also benefited from the widespread adoption of digital channels, reporting sales rising above pre-pandemic levels.

Darden Restaurants, which owns Olive Garden and LongHorn Steakhouse, among others, announced earlier this month that, in the quarter ended November 28, sales across brands were up 10% relative to the same quarter two years prior. Similarly, Brinker International, parent of Chili’s Grill & Bar as well as other full service chains, announced in early November that, in its most recent quarter on record, comparable restaurant sales were up 6% on a two-year basis. 

In fact, the entire restaurant industry has seen a sales rise outpacing inflation. According to United States Census Bureau data for October, the most recent month on record, nationwide seasonally adjusted sales at food services and drinking places was up 11% relative to 2019.  

Still, not all restaurants are enjoying these same increases. For small independents, even those that managed to survive the onslaught of challenges that 2020 posed, it was a difficult year.

Findings from PYMNTS’ December 2021 Main Street Index study, created in collaboration with Melio, which looks at growth in new establishments, real wages and employment across America’s small businesses, show that Main Street’s restaurants lag behind small businesses in other industries, remaining around 20% below 2019 performance. 

Read the full report: The Main Street Index 

“Dining demand is back, and I think anybody who’s eaten out in the last several months has probably seen that,” Alex Lee, vice president and general manager of Resy and the American Express Global Dining Network, told Karen Webster in an interview last month. “But I think the theme we look at more than anything is that the recovery from COVID has been unequal and inconsistent.” 

See also: Dine-In Restaurant Recovery Hinges on Digital Experiences