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

39 Pages Posted: 4 Oct 2021 Last revised: 25 Apr 2022

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 outbreak of the COVID-19 pandemic has caused unprecedented damage to restaurant businesses, especially for 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. The restaurant industry is experiencing a dramatic transformation under the crossfire of these two driving forces. However, we are not fully exposed to those changes due to the lack of first-hand data, let alone the potential consequences and implications. To address such needs, this study applies foot traffic data from the Washington metropolitan area to understand the evolving trends of restaurant service demand through the pandemic. We first analyze the aggregate foot traffic volumes to reveal the disruptions to restaurant services across the different stages of the pandemic. A probabilistic learning model is then proposed to decompose the aggregate foot traffic by service modes into those for dine-in and takeout, respectively. The transitions in demand structures are identified for restaurants of various service types, price levels, and locations. In the short term, limited-service and budget restaurants, given their comparative advantages in and adaptations toward takeout channels, saw a significantly more speedy recovery than full-service counterparts. But in the long run, results suggest the preserved demand for dine-in services at full-service restaurants, particularly those supply more premium dining environments and services. Comparatively, the offline channels at limited-service restaurants appeared vulnerable to the cannibalization from online ordering and delivery channels, which strengthened even after the society moved out of lockdown. Regionally, exurban restaurants seem to embrace increasingly of 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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