U.S. restaurant recovery hits a bump as COVID-19 cases surge

Customer transactions at major U.S. restaurant chains declined by 13% in the week ending June 21 versus the same week one year ago, which is slightly softer than the 12% decline in the previous week, reported The NPD Group. This is the first time since the week ending April 12 that there has not been an improvement in the year-over-year trend. COVID-19 case surges in several states contributed to the backtrack in decline improvements.

With new COVID-19 cases suddenly surging across multiple states, some of the states that have been reporting the highest number of new cases experienced steeper declines in major restaurant chain customer transactions in the week ending June 21. Arizona, with a well-publicized surge in cases, saw a 5-point decline in year-over-year transactions for the week, according to NPD’s CREST Performance Alerts. Restaurant transactions in Florida, Nevada, and North Carolina—all of which reported spikes in COVID cases—declined 2 points, 4 points, and 5 points, respectively. Customer transactions in California and Texas, both of which have a large number of restaurants, were flat compared with the prior week.

Despite the setback for the industry, major full-service restaurant chains did benefit from an increase in the number of localities and states that now permit on-premise dining. The percentage of restaurant units that were allowed to reopen dine-in operations increased to 79% in the week ending June 21 versus 74% in the prior week. Full-service restaurant transactions declined by 24% in the week compared with one year ago versus a 26% decline the week prior. Customer transactions at quick-service restaurants declined by 12% in the week ending June 21 versus one year ago compared with an 11% decline in the week ending June 14.

“The U.S. restaurant industry’s road to recovery is going to have some bumps along the way,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America, in a press release. “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.”