By age, 69% of respondents 18-34 and 62% of age 35-54 indicated "somewhat more" or "much more" OSR visit frequency with mobile order
COVID-19 impact accelerating digital adoption & gains; Most gains should last
Restaurants are experiencing a significant acceleration in digital and off-premise sales mix and growth in the current environment, w/ much of the gains likely to be maintained longer-term. We utilized UBS Evidence Lab data to help assess digital demand and sustainability of gains, while analyzing mobile app growth to identify brands best positioned in the current & post-COVID-19 environment. Specifically: 1) we analyzed app download metrics across 74 food delivery, QSR, & casual dining chain apps, believing increased downloads correlates w/ current increased digital utilization and longer-term engagement, which supports sales growth; and 2) digital/delivery survey of >1,400 US respondents indicates mobile order capabilities drive increased visits, w/ brands w/ the strongest existing digital relationships best positioned. We also spoke with industry contacts & management teams to assess progress against digital initiatives and gain confidence in the sustainability of digital gains.
Existing digital relationships best positions brands; Outperformance continues
Although casual dining lags QSRs on digital, many brands have increased off-premise and digital sales significantly, with much digital adoption penetration likely to stick, particularly as dining room capacity constraints linger.
Delivery growth & overall off-premise shift support expanded digital footprint
We expect digital/mobile growth, which was already an increased focus for larger chains, accelerates in terms of relevance to brands & customer adoption. Digital will be increasingly important to customer relationships & communication in order to drive traffic, on top of existing benefits to higher avg. ticket, speed/accuracy, and customer insights. We estimate recent digital sales gains of up to 2-3x for select brands could see notable sustainability, reflecting long-term social distancing behaviors and channel shifts.