Dining Out Market Value to Decrease by $750 Billion Through 2024: Report

By McKenzie Carpenter Tuesday, February 16, 2021

The COVID-19 pandemic has changed the way people live their lives and how business is conducted in most industries. One particular industry that has been arguably hit the hardest is the restaurant and dining out industry. According to a Technavio report, the dining out market is expected to decrease in market value over the course of the next four years.

A waiter taking contactless payment at a cafe.

The Rise of Food Delivery

Due to the COVID-19 pandemic’s shutdowns across the country, people have not been able to dine in at restaurants. Consequently, grocery and takeout delivery apps have seen a surge in the last year as more people have been ordering food rather than dining out to avoid leaving their homes.
Grocery delivery has seen an increase in recent years; however, the COVID-19 pandemic has accelerated this growth. In March 2020, at the very beginning of the nationwide shutdowns, grocery delivery services like Instacart, Walmart Grocery, and Shipt saw download surges of 218%, 160%, and 124%.

Furthermore, takeout delivery services have also seen a surge in downloads and orders. DoorDash, which owns 50% of the takeout delivery market share, has 181 million orders in 2019 but tripled in orders for 2020, resulting in 583 million orders. This company and other big market players like Grubhub, Uber Eats, and Postmates collectively saw a $3 billion revenue rise in quarters two and three in 2020, compared to the same quarters in 2019.

While these sectors of the market have experienced a revenue increase, the full-service dine-in restaurant industry has experienced the opposite.

$750 Billion Dining Out Market Value Reduction

The dining out market has been greatly affected by the COVID-19 pandemic because of restrictions put in place at the state and local levels. The startup released a report detailing the impact of the pandemic on the restaurant industry.

The business’s report predicts the dining out market is expected to decline $750 billion between 2020 and 2024 at a compound annual growth rate (CAGR) of -9%. With no real end in sight, the effects of the COVID-19 pandemic will be felt for the next few years as it may take people and companies a while to recover from the current restrictions.

With that said, fast food restaurants have not been affected as greatly as dine-in service restaurants. For example, full-service restaurants in the US experienced a 47% decrease in attendance due to social distancing guidelines and state and local restrictions. Conversely, fast food restaurants only experienced a 17% decrease, as fast-food restaurants are more easily adaptable to COVID-19 protocols. All factors considered in 2020, the restaurant industry felt a $250 billion loss as a result of the pandemic.

Final Takeaways

The COVID-19 pandemic has had an immense impact on the restaurant industry, specifically dining service. Unfortunately, the market has suffered greatly, and with no clear end to the pandemic, the trend in loss of sales is expected to continue to decrease for businesses.

About the Author

Headshot for author McKenzie Carpenter

McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.

Related Articles