U.S. restaurant industry recovery stalls with no improvement in six weeks

COVID case surges across the United States and the subsequent rollbacks in re-opening plans have stalled the U.S. restaurant industry’s recovery, reported The NPD Group. Major restaurant chain customer transaction declines have been between -11% and -14% since the second week of June versus the same period last year. There had been a steady improvement in declines from the last week in April through the second week in June. In the week ending July 19, major restaurant chain total customer transactions were down 12% versus a year ago, compared with -14% in the prior week, according to NPD’s CREST Performance Alerts.

In the week ending July 19, 78% of restaurants were in geographies that permitted on-premises dining with varying capacity restrictions. California has 13% of the nation’s restaurant units, all of which were prohibited from offering on-premises dining during this time. Many restaurants were also operating well below normal capacities in terms of menu offerings and store hours, which were operator decisions made partly due to the pandemic situation overall and partly due to the difficulty in attracting labor.

“I believe there is still a lot of upside recovery for restaurants, but for now, we’re stuck in neutral until we can get the industry operating at full capacity,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “The ‘recovery’ phase will then tell us whether the industry can recapture enough customer traffic to get back to the pre-COVID baseline, or whether the new normal will reflect a reset where consumers prepare more meals in their home kitchens for a longer-term.”