A Roundup of Noteworthy Foodservice Findings for the Week of Oct. 26, 2020 ECONOMIC IMPACT NAVIGATOR

Industry Insights A roundup of noteworthy foodservice findings for the week of Oct. 26, 2020 ECONOMIC IMPACT NAVIGATOR

AVERAGE NUMBER OF RESTAURANT VISITS Restaurant Visits IN THE PAST WEEK

Sep 28 Trending Flat 2.99

Apr 6 Over August and September, visits per cautious approach to returning to 2.38 week have been fairly consistent, foodservice. hovering just below three visits a week. Presently, the average number of visits Weather will likely have an impact on per week is down about 13% from the May 25 visits over late fall and winter, once 2.54 2020 peak of 3.44 visits per week. outdoor dine-in service becomes more difficult to manage in many parts of the Visit behavior is consistent with other country. economic signs like unemployment, which suggest a stalled recovery after COVID-19 case totals have surged major gains in June and July. since September. It’s unlikely we will see visit frequency rise to pre-COVID- 19 levels until the virus itself is contained. Around a third of consumers still have not visited restaurants for dine-in service since it has become available, indicating that there is a subset of consumers who are taking a Jul 6 Jun 8 Mar 2 Aug 3 Aug Jul 20 Jul Apr 13 Apr 27 Jun 22

Note: Consumer surveys fielded weekly with a national representative sample of 500 consumers Mar 16 Mar 30 Aug 17 Aug 31 Aug 14 Sep 28 Sep Base: Among consumers who ordered food and beverage from foodservice locations in the past week 11 May 25 May Q: Please indicate how many visits you made to each in the past week (or last seven days) for each daypart Source: Technomic Economic Impact Navigator Program Week Beginning

CHIPOTLE MEXICAN GRILL Digital Sales Surge DIGITAL SALES SHARE BY QUARTER (%) for Chipotle 60.7% 48.8%

Digital sales at Chipotle Mexican Grill Same-store sales performance hit $776.4 million for Q3 2020, improved significantly for Chipotle in the accounting for nearly 49% of the third quarter, increasing by 8.3% after company’s total quarterly sales. During registering a decline of 9.8% during the the same quarter of 2019, digital sales prior quarter. 26.3% comprised just over 18% of sales. Approximately half of Chipotle’s digital 18.2% 18.3% 19.6% sales for the quarter came via delivery 15.7% orders with the remainder resulting from order-ahead transactions placed on the company’s app and website.

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020

Sources: Technomic Ignite company data; Chipotle Investor Relations

© 2020 Technomic, Inc. 3 CONVENIENCE-STORE MEMBERSHIP NEW OPTIONS Heat and Eat Express Meals Kitchen Cravings Take Six new dinner entrees for heat and Home Meals serve, including new burgers, Daypart Innovations A line of 10 classic homestyle pastas and braised meats. (Wawa) entrees packaged to heat and serve. (Kwik Trip)

Address Lifestyle Dinner Plates New items include grilled chicken tenders, smoked pork ribs and Shifts more. (Kwik Chek) This year ushered in seismic lifestyle at dinner. Current daypart innovations shifts for c-store customers. Shelter-in- for dinner call for a plethora of heat- place orders and widespread work- and-serve dinners that are packaged for from-home policies sparked a grab-and-go and delivery. These slowdown in traffic in the convenience options are more substantial, higher in channel. protein and hearty in order to be suitable for the evening meal. Kids Having long owned the morning with meals are also part of the new dispensed coffee programs, c-stores equation, meeting the needs of family experienced a slump in breakfast dining parties. daypart sales. Lunch occasions also took a dip as guests who would normally fuel up midday spent more of those hours at home. While c-stores reposition themselves for a recovery in 2021, part of their latest strategy is to uncover new opportunities

Source: Technomic 2020 Reviving C-Store Foodservice webinar Image Source: Wawa Facebook

© 2020 Technomic, Inc. 4 IGNITE CONSUMER ATTRIBUTE CATEGORY ROLLUPS (TOP BOX RATINGS) AMONG CONSUMERS WHO ORDERED ONLINE FOR DELIVERY Digital Orders at FSR: DURING THEIR MOST RECENT FULL-SERVICE CHAIN BRAND VISIT

58% Overall Rating Elevated Ratings for 46%

Service & 59% Restaurant-Direct Hospitality 58% For recent delivery orders placed Nevertheless, aspects of brand loyalty 57% online, full-service chains see are not stronger among either guest Food & Beverage significant gaps in brand performance group. Operators looking to grow their 47% ratings between diners placing orders restaurant-direct orders must think directly on the restaurant website or about leveraging this unfiltered Convenience & 66% Restaurant website/app app and those who used a third-party customer interaction to better build Takeout 57% aggregator. guest loyalty. Third party Guest perceptions of food quality and 53% taste, convenience and value are higher Value among restaurant-direct consumers, 43% and the gap in overall visit satisfaction scores is significant. 52% Technology 46%

32% Brand Fit & Loyalty 32%

Base: 2,047 recent delivery consumers, including 1,113 who placed delivery order via restaurant brand website/app and 934 who placed delivery order via third party Source: Technomic Ignite consumer brand metrics data, Q1 2020-Q2 2020

Where the Biggest TOP THREE GROWTH MARKETS FOR TOP FIVE GLOBAL CHAINS

Chain Name Market Name Annual Change % Global Chains Are Burger King India 66.7% Burger King Chile 23.9% Burger King France 21.0% Growing Fastest KFC Argentina 90.0% The world’s biggest restaurant players opened its 200th location there just last KFC Brazil 47.4% continued their expansion efforts across week (on Oct. 22). the globe last year. Looking at the top KFC Spain 26.1% China is the top growth market for five players by unit count—Subway, McDonald’s and third-leading growth McDonald's China 12.7% McDonald’s, Starbucks, KFC and market for Starbucks—a signal of the Burger King—gives us an interesting McDonald's Indonesia 10.7% incredible amount of potential for unit glimpse into which countries are seeing development for chains. McDonald’s McDonald's South Africa 9.5% the most growth. grew nearly 13% to 3,383 units, and Starbucks India 25.8% KFC’s top two growth markets are Starbucks grew 17% to reach 4,125 Brazil and Argentina. While not highly locations. Neither show signs of slowing Starbucks Saudi Arabia 21.1% penetrated yet, Latin America likely still down. presents a growth opportunity for KFC Starbucks China 17.1% Asia is showing promise for Subway. and potentially other chicken players as Two of the chain’s top three growth Subway Thailand 13.4% well. markets globally are Thailand and Subway Saudi Arabia 11.7% India is the country with the most South Korea. growth for both Starbucks and Burger Subway South Korea 9.6% King. The Seattle-based coffee chain

Source: Technomic Global Foodservice Navigator Program

While limited-service Limited Service Full Service restaurants tend to have Olive Garden 51% higher ad awareness Subway 50%

(including TV, radio, McDonald's 48% Applebee's 39% internet or other digital channels), it’s a full- KFC 45% Red Lobster 35% service restaurant Taco Bell 42% Buffalo Wild Wings 32% (Olive Garden) that topped the overall list Wendy's 41% IHOP 30% Subway and McDonald’s have Pizza Hut 40% Chili's Grill & Bar 30% the highest ad awareness among limited-service Burger King 40% TGI Fridays restaurants. 28% Among full-service restaurants, Domino's 38% Denny's 28% ad awareness is highest for Olive Garden—leading other Little Caesars 38% Outback Steakhouse 28% brands, such as Applebee’s and Red Lobster, by a Papa John's 37% significant margin. Dave & Buster's 27%

Source: Technomic Consumer Visit Tracker

COVID-19 Disruption Index is requirements, population densities powered by Shortest Track, utilizing and mobility, group size limitations AI, machine learning and disparate and lifestyle risk factors contributing COVID-19 PERCENT PERCENT TOP 5 MOST DISRUPTED MARKETS sets of data resources to quantify to spread. More information is DISRUPTION INDEX CHANGE CHANGE BY INDEX POINT CHANGE (MAX: 1.00, HIGH VERSUS VERSUS the potential risks that U.S. available HERE. (VERSUS PREVIOUS WEEK) businesses face from the spread of DISRUPTION) LAST WEEK LAST MONTH the COVID-19 virus at the market Change Versus Previous Week level. and Month Change versus previous 1 Providence-Warwick, R.I. 0.705 1.40% 3.58% The highest index possible is 1.00, week/month allows users to see if which is not good and reflects the market is becoming more or less 2 Bismarck, N.D. 0.443 1.46% 13.12% markets that are extremely disrupted over time. Changes that disrupted. The index is updated on a are positive (+) show a move toward Norwich-New London, 3 0.630 0.92% 2.44% weekly basis. becoming increasingly more Conn. impacted by COVID-19 (not good). The COVID-19 Disruption Risk Changes that are negative (-) show 4 Jefferson City, Mo. 0.556 0.90% 6.00% Index shares weekly updates a trend toward being less impacted through a business lens, rather than by COVID-19 (good). 5 Pocatello, Idaho 0.499 0.96% 6.94% a health lens, and incorporates more than 20 different data signals to Ignite Subscribers: Download full measure disruption and predict market report future impact. These signals include infection rates, deaths, state-level restrictions and social distancing

Notes: Data updated Oct. 19, 2020 Source: Shortest Track

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