Dine in or Take out? Trends on Restaurant Service Demand amid the COVID-19 Pandemic

51 Pages Posted: 4 Oct 2021 Last revised: 7 Feb 2024

See all articles by Linxuan Shi

Linxuan Shi

George Washington University - Department of Civil and Environmental Engineering

Zhengtian Xu

George Washington University - Department of Civil and Environmental Engineering

Date Written: April 21, 2021

Abstract

The COVID-19 pandemic has caused unprecedented damage to restaurant businesses, especially indoor dining services, due to the widespread fear of coronavirus exposure. In contrast, the online food ordering and delivery services, led by DoorDash, Grubhub, and Uber Eats, filled in the vacancy and achieved explosive growth. As a result, the restaurant industry is experiencing dramatic transformations under the crossfire of these two driving forces. However, these changes are not fully exposed due to the lack of first-hand data, let alone their potential consequences and implications. This study thus leverages foot traffic data to reveal and understand the trends of restaurant service demand through the pandemic. We devise a mixture model to decompose the aggregate foot traffic by dwelling time patterns into dine-in and takeout volumes. The transitions of demand structures are then identified for various restaurant sectors by service types, price levels, and locations. We observe that limited-service and budget restaurants saw a significantly faster recovery than full-service counterparts, given their comparative advantages in adapting toward takeout channels. But in the long run, our results suggest more robust demands for dine-in services at full-service restaurants, particularly those that provide more premium dining experiences. Comparatively, the offline channels at limited-service restaurants appeared vulnerable to the cannibalization from online ordering and delivery channels, which strengthened even after society moved out of lockdown. Regionally, exurban restaurants seem to trend toward the takeout mode, while urban areas did not see a notable modal migration between dine-in and takeout from restaurants.

Keywords: COVID-19 pandemic, restaurants, on-demand services, online food delivery

Suggested Citation

Shi, Linxuan and Xu, Zhengtian, Dine in or Take out? Trends on Restaurant Service Demand amid the COVID-19 Pandemic (April 21, 2021). Available at SSRN: https://ssrn.com/abstract=3934589 or http://dx.doi.org/10.2139/ssrn.3934589

Linxuan Shi

George Washington University - Department of Civil and Environmental Engineering ( email )

800 22nd Street NW
Washington, DC 200052
United States

Zhengtian Xu (Contact Author)

George Washington University - Department of Civil and Environmental Engineering ( email )

800 22nd Street NW
Washington, DC 200052
United States

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