Restaurant Sales are Slowly Returning
Source: Restaurant Business
Restaurant sales continue to improve as customers grow more comfortable with dining out.
Restaurant sales rose to 71.2% of pre-COVID-19 levels during the week ended Aug. 2, according to data from the software company Crunchtime.
The numbers have been particularly strong at fast-food and fast-casual restaurants, where the recovery has been most forceful as consumers flock to drive-thrus and opt for delivery and other takeout. Crunchtime uses data it aggregates from its chain restaurant clients.
Other data suggests that customers are spending at restaurants in part as a getaway from the monotony of quarantine.
According to the financial data firm Facteus, which uses credit card data, restaurant spending was down just 2% last week and spending at fast-food restaurants increased 13% during the week ended Aug. 2.
Overall, however, consumer spending was down 13% last week, continuing a holding pattern that started in July.
Consumers also spent money at retail—places like grocery stores and wholesale clubs were up 21% last week.
On the other hand, they traveled less: Travel spending declined 48%. And they didn’t go to movies at all. Theater spending was down 96% year-over-year. Amusement park spending declined 64%, and total entertainment spending was down 25%.
Industry spending has been slowly returning since April. In early May, total sales were 47.5% of pre-pandemic levels, according to Crunchtime. By the week ended July 5, sales were at 63.6% according to the data, which also analyzes airport concessions and entertainment venues.
While the coronavirus has made an unfortunate summer upswing, the improvement hasn’t completely stopped—though a return to dine-in restrictions in states like California and continued limits on capacity have certainly held back sales.
Fast-food chains have been a big beneficiary of the pandemic, thanks largely to the existence of the drive-thru and the prevalence of delivery at pizza chains like Domino’s and Papa John’s.
Wendy’s on Wednesday, for instance, said its July same-store sales were up 8.2%. At McDonald’s, same-store sales turned positive for the month. The same was true at Starbucks locations with drive-thrus.
According to Crunchtime, quick-service sales were 97% of pre-pandemic levels and fast-casual chains, whose recovery has progressed more slowly, were at 92.3%.
At the same time, there is a big difference between full-service and limited-service chains and many concepts that rely heavily on consumers eating inside of restaurants continue to struggle.
Full-service restaurants, whose capacity is limited, were up to a post-pandemic high of nearly 60% of pre-COVID sales last week, up from 57.6% the week before and 51.8% in early July.
On the other hand, airports remain weak. Those sales are just 27% of their pre-pandemic levels.
The big question for the industry going forward is the economy. With millions still unemployed, $600 in extra weekly unemployment benefits expired last week with no subsequent deal emerging between the White House and Congress for a successor benefit.
Those benefits have helped fuel the industry’s recovery as consumers’ incomes increased even while unemployment skyrocketed. The loss of those benefits has elicited concerns that it could lead to a cutback in restaurant spending as consumers readjust their budgets.