US restaurants business steadily warmed up since the darkest days of the COVID-19 pandemic in April until the recent surge in cases put eating out on a backburner, according to a new report from NPD Group.
Customer transactions at major restaurant chains dipped to -13% year over year for the week ending June 21, the market research company said. That compares with -12% YOY for the week prior.
"This is the first time since the week ending April 12 there has not been an improvement in the year-over-year trend," NPD Group said in its report.
Part of the decrease from week to week resulted from Father's Day, which the report noted typically "is more of a backyard BBQ occasion than a restaurant dining event."
The same week also saw more restaurants allowed to emerge from government shutdown and capacity limitations; however, those looser restrictions came during the recent surge in cases. The surge also contributed to the softer transactions number, NPD said.
Looking at individual states, transactions dropped 5 points in Arizona, where the surge in cases has been widely reported, and North Carolina. Nevada dropped 4 points, and Florida declined 2. Transaction numbers in Texas and California remained flat. Numbers for other states were not provided.
By restaurant type, full service locations were down -24% YOY the week ending June 21. That was up slightly from the prior week's -26% decline. Quick service restaurants were down -12% YOY and down -11% YOY for the week ending June 14.
These numbers indicate restaurants recovery will not continue with the steady gains they had been biting back since April, said David Portalatin, NPD food industry advisor.
"The US restaurant industry's road to recovery is going to have some bumps along the way," Portalatin said. "The pandemic isn't over and, as often mentioned, is 'unprecedented' so there is no road map. The foodservice industry is solidly in the restart phase as restaurants begin to reopen on-premise operations, adopt and implement new procedures and protocols, and keep plans fluid because things could change quickly."
Restaurants took a massive hit when the COVID-19 hit U.S. shores as stay-home orders and restrictions on non-essential businesses closed dining rooms around the country. Venerable children's favorite Chuck E. Cheese pizza restaurants filed for bankruptcy, highlighting the struggles of retail as customers deal with social distancing and concerns over catching the coronavirus.
Elsewhere in the restaurant industry, some household names already had issues before the outbreak began, and those have been exacerbated.
As for these restaurants' and other retailers' real estate, that's expected to adapt during and after the pandemic. More eateries and shops now offer online ordering and carryout, tables sit farther apart to account for social distancing, and outdoor dining is more common.
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Thomas Phillips
Thomas Phillips is part of the social media team at ALM Media.
