The 2021 outlook: restaurants and retail in the U.S.

With indoor dining returning to states like Philadelphia, and reopenings on the cards for big cities like Chicago, it’s important to gain a sense of how comfortable U.S. consumers really feel about eating out. 

Our December Zeitgeist research helps us benchmark American attitudes toward dining, relative to other indoor activities.

Just under 1 in 3 said they’d feel comfortable dining indoors, which is 16 percentage points below our figure for in-store shopping. 

These numbers aren’t ideal for the hospitality industry. But when indoor dining is permitted more broadly, restaurants can still bolster their chances of recovery. 

They’ll need to understand what precautions consumers value most, as these are the best means of changing America’s outlook on eating out into a more positive one. 

Dining out is still on the table for many consumers.

Faith in U.S. organizations’ ability to contain the pandemic has declined since the start of the outbreak: between March-December, those who say they feel optimistic the country will overcome coronavirus dropped from 56% to 44%. 

A future where high numbers of diners return to restaurants isn’t inconceivable though. In July, 40% of Americans said they planned to eat out at restaurants less post-outbreak, meaning the other 60% were still open to the idea; they’re just eager to see their safety concerns being met.

There are many uncertainties to consider, and a couple worth highlighting. Members of Biden’s advisory board have been advocating a curb on indoor dining since November; the next few months could see them achieve this on a national scale, or recently liberated cities revise their plans.

But for the time being, here are the main ways restaurants can calm anxiety levels and win over some of those still sitting on the fence. 

On the whole, our data undermines the idea that Americans are generally against mask wearing and keen to start eating out again. In reality, many support government advice on mitigating COVID, are wary about returning, and want to see these procedures in action. 

If restaurants want customers to feel safe within their doors, social distancing and reduced capacity are the first boxes that need ticking.

Even though these are the most common methods adopted by restaurants, states have different rules on numbers, so enforcement is far from universal.

For example, Arkansas’s restaurants are legally allowed up to 66% seating capacity, as long as other restrictions are followed – essentially making it a venue-based judgement call. 

A building filled to two-thirds of its occupancy could be enough to put uneasy diners off for quite some time. Restaurants that take their own initiative and open up fewer tables ultimately stand a better chance of securing repeat customers. 

Likewise, while compliance here is lower than in other parts of the world, over half of U.S. consumers are asking that masks be worn when people aren’t seated; and for this instruction to be mandatory if they’re to consider coming back. 

There’s some age variation across these wider trends. Older consumers come out on top when it comes to wanting limited numbers and mask wearing, while younger diners stand out most for seeking additional touches like temperature checks, hand sanitizer, and contactless ordering. 

16-24s are 20% more likely than other age groups to be encouraged by temperature checks. 

For those who can afford it, investing in fresh technologies like portable air purifiers and “cleanse portals” (machines that use safe UV lights to kill viruses) is a particularly successful tactic for restaurants that tend to draw in younger crowds.

Demand for in-store retail isn’t dead, just asleep. 

Surprisingly, worry for infectious diseases like COVID-19 has decreased since Q2 2020. However, it’s easy to misinterpret this data. These figures can partly be explained by growth in understanding and awareness, as consumers no longer fear the unknown. 

But despite being better accustomed to coronavirus, Americans continue to adopt a lockdown lifestyle – which favors online shopping and puts the brakes on crowd-based activities like eating out. 

Between Q2-Q4 2020, the portion of U.S. consumers using Instacart has more than doubled. This explains the company’s efforts to reimagine the shopping experience by introducing a fresh pickup model for the retailers it serves, while winding down its in-store operations. 

Even now most shops are allowed to open, social distancing rules place limits on store capacity, which has contributed to the bankruptcies of several major U.S. companies. These events have helped online businesses like UberEats gain popularity. 

As a result, many consumers have seen their buying habits shift over the past year. 

Going back to July, 37% of Americans said they planned to shop online more frequently in the outbreak’s aftermath – compared to an average of 49% across 18 countries. A large segment of U.S. society were therefore happy with their online-offline shopping balance, with no plans to ditch stores in the new normal. 

But while American numbers are relatively low, 37% increasing their rate of online buying is enough to leave a noticeable mark on overall purchase behavior, assuming these intentions are fulfilled. And we’re seeing this scenario play out in our USA dataset, which allows us to track attitudes across 2020. 

More U.S. consumers have become weekly online buyers since Q2. Many shopped online long before the pandemic, but a significant number have now upped their frequency. 

This means higher levels of online shopping are inevitable as the post-pandemic dust settles. But it’s helpful to balance these behavioral insights with attitudinal data when contemplating permanent habits. 

The portion of Americans who say they typically prefer to buy in-store stayed fairly consistent across 2020. There’s been a slight drop overall which can largely be attributed to 55-64s, who’ve developed a newfound taste for all things online. 

But age aside, even some of the worst-hit states like New York and Georgia show little or no change in mindset; and compared to indoor dining, 65% feel either comfortable or neutral shopping out. 

The Placer report, which examines the transactions of seven leading U.S. grocers, saw average weekly year-over-year visits in the lead-up to Christmas 2020 actually increase by 2.5%. The overall number of guests did shrink slightly, but faithful in-store shoppers appear to have made up for lost time; and a drop of 1% in visitors on Christmas Eve is still impressive, given the situation. 

These statistics and our attitudinal data support the idea that holiday shopping is embedded in American culture, and remains a tradition many are reluctant to part with.

Shopping habits have shifted toward online buying; but the impact on outlook is less pronounced.

Unless future events have a greater influence on buying sentiment, demand for in-store retail is likely to re-emerge post-pandemic. 

It’s also partly down to indoor venues to determine the extent of 2021’s attitudinal shifts. They can still turn heads by ensuring first-rate standards of protection and promoting parts of the in-person experience that can’t be replicated online. 

To sum up:

• In today’s incredibly dynamic situation, the future of U.S. buying habits somewhat depend on how long indoor sites remain shuttered. American consumers are seeing more closures, and becoming more adjusted to buying online and entertaining indoors. 

• However, many shoppers remain open to the idea of returning to shops post-pandemic, which means retailers should be able to lure back customers if attitudes remain consistent across 2021.

• The outlook for indoor dining is less positive than for in-store shopping, but nothing is set in stone. Restaurants now have an opportunity to prove and broadcast their commitment to safety as states continue reopening their economies. 

• The industry’s success will set the tone for other indoor events like music concerts. With many Americans uncomfortable in these settings, it’ll take a lot to get consumers back to these venues once they’re permitted to unlock their doors; and the lessons demonstrated by restaurants will facilitate this process.