RESTAURANT SALES TRENDS – PUTTING IT IN CONTEXT – THE PAST, PRESENT & FUTURE!
The next few weeks will be interesting as publicly held chains report second quarter results and provide sales updates. In the meantime, this industry is more transparent than most so we can get a pretty good picture.
Chains well equipped to provide off-premise dining, including drive-thrus, takeaway and delivery have survived relatively well. Domino’s and Wingstop are at the top of the heap, with solidly positive sales comparisons. Fast casual operators have recovered a lot, but are still reporting negative comparisons, from low single to low double digit amounts. Full service dining has been most dramatically impacted, and provides insight to the general pace of economic activity around the country. The daily numbers from Open Table correlate closely with other tracking services, as well as updates by publicly held restaurant companies. You can see the sales fall off the ledge from March 9th to a negative 100% a week later. I’ve set these US National numbers up on a weekly basis so you can compare Monday against Monday, etc.
After a steady improvement from mid-May through most of June, virtually all reporting services are showing modest sequential sales declines, 3-4 points in full service to a point or two in fast food.
We think it is premature to think the recovery is over. The week of July 4th creates distortions, and barbecue weather, or lack thereof, comes into play. However, the numbers and charts below clearly show the recovery trend has slowed.
The numbers from California, Texas, Florida and Arizona are broken out in the charts below and clearly show weaker trends than the national report above. The noteworthy slowdown is not only a function of dining room capacities being scaled back but the 24 hour drumbeat from the press as far as infection rates, hospitalization and deaths. Texas (lower right), for example, scaled back dining room capacity from 75% to 50% on June 26th.
WHERE ARE WE NOW, AND WHERE DO WE GO FROM HERE?
The recovery has clearly slowed, if not stalled out. It is anybody’s guess as to whether, and when, sales start to recover further. However, California has closed dining rooms again and it seems like very few states are prepared to open dining rooms further and faster. In New York City, there are lots of outdoor tables taking up sidewalk and parking spaces, and that is likely to be the case through the summer at least. It is our judgement that, until a vaccine is nationally available, further sales progress will be hard earned.