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

Linxuan Shi () and Zhengtian Xu ()
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Linxuan Shi: Department of Civil and Environmental Engineering, The George Washington University, Washington, District of Columbia 20052
Zhengtian Xu: Department of Civil and Environmental Engineering, The George Washington University, Washington, District of Columbia 20052

Service Science, 2024, vol. 16, issue 4, 241-271

Abstract: The COVID-19 pandemic has caused unprecedented damage to restaurant businesses, especially indoor dining services, because of 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 because of the lack of firsthand 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 off-line 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, whereas 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 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orserv:v:16:y:2024:i:4:p:241-271

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