COVID Case Spikes Begin to Dampen Restaurant Sales

    Industry News | June 29, 2020

    Customer transactions at major U.S. restaurant chains declined by 13 percent in the week ending June 21 versus the same week a year ago, which is slightly softer than the 12 percent decline in the previous week, reports The NPD Group. This is the first time since the week ending April 12 there has not been an improvement in the year-over-year trend. 

    COVID-19 case surges in a number of states contributed to the backtrack in decline improvements. The current period also included Father’s Day, which unlike Mother’s Day, is more of a backyard barbecue occasion than a restaurant dining event.  

    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 week ending June 21. 

    Arizona, with a well-publicized surge in cases, saw a 5-point decline in year-over-year transactions in the week, according to NPD’s CREST Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 72 quick service, fast casual, midscale, and casual dining chains.  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 to 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 are allowed to reopen dine-in operations increased to 79 percent in week ending June 21 versus 74 percent in the prior week. The full service restaurant segment declined by 24 percent in the week compared to year ago versus a 26 percent decline week prior.  Customer transactions at quick service restaurants declined by 12 percent in week ending June 21 versus year ago compared to an 11 percent decline in week ending June 14. 

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

    News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.