COVID-19 case spikes continue to hinder U.S. restaurant recovery

The recovery of U.S. restaurant customer transactions has stalled for the second week in a row as COVID-19 cases continue to increase in several states, reported The NPD Group. For the week ending June 28, total customer transactions at major U.S. restaurant chains were down 14% versus the same week one year ago. For the week ending June 21, total transactions were down 13% versus one year ago, according to NPD’s CREST Performance Alerts.

The rise in COVID-19 case counts is causing local and state authorities to delay reopening, and in some cases, reinstate on-premise restaurant dining restrictions. In Texas, for example, restaurants may continue to offer on-premise dining, but capacity is rolled back from 75% to 50%. California announced last week the closing of its nearly 86,000 restaurants to on-premise dining.

These policy changes hurt full-service restaurants (FSRs) most. Nationwide, FSR customer transactions for the week ending June 28 were -25% versus the prior year, down only 1 point versus the previous week’s year-over-year comparison, but several states where COVID-19 is gaining saw the biggest declines in FSR transactions. Louisiana, South Carolina, Texas, North Carolina, Georgia, and Arizona led the FSR decline, decelerating 6–9 percentage points in year-over-year comparisons from the previous week. Customer transactions at major quick-service restaurant chains declined by 13% compared with the same week last year, down 1 point from the previous week’s decline.

“It’s apparent that the road to recovery is going to be a challenging one for the U.S. restaurant industry,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Consumer demand is there as is the want for normalcy, but there is nothing normal about this situation.”