Retail

Restaurant Sales Start To Rebound As Diners Return

It’s the news many have been waiting to bite into.

While fast-food chains with drive-throughs were more prepared than dine-in restaurants to handle the impact of the coronavirus pandemic, the gap could begin to diminish as eateries welcome diners.

The Associated Press reported that chains like Applebee’s and Olive Garden saw sales plummet by 79 percent compared to the prior year at the beginning of April, as lockdowns closed down eateries nationwide, according to data from NPD Group.

Fast food sales fell as well, by 41 percent, the New York-based market research firm found.

But one month later, those numbers are starting to improve, the news service reported. For the week ending May 10, full-service restaurant transactions were off by 58 percent compared to the same week a year ago, while fast-food sales slipped by 21 percent, a modest sign that the trend may be headed in the other direction.

States that have reopened the greatest number of dining rooms, such as Tennessee and Texas, had some of the highest sales, the AP reported.

Applebee’s has reopened 200, or 12.5 percent, of its 1,660 U.S. dining rooms. “America is hungry to dine out again,” Applebee’s President John Cywinski told the news service. “They’re naturally curious and cautious, but they’re coming out.”

Olive Garden opened 179, or 21 percent, of its 866 dining rooms during the week of May 3. That number jumped to 398 by the week of May 17, or 49 percent of the total locations. Sales per restaurant rose 13 percent during that timeframe, the company told the AP. Cynwinski said the hope is that Olive Garden will reopen 80 percent of its dining rooms by the end of June.

“There’s so much pent-up demand,” he told AP. “It’s a little indulgence now to hop in your car and experience something that hasn’t been available.”

Brian Vaccaro, an analyst with Raymond James, told the news service that as of this week, 32 states, mostly in the Midwest and the South, have allowed dining rooms to open.

McDonald’s has so far only reopened 125 of its 14,000 U.S. dining rooms. The fast-food restaurant has also distributed a 59-page rule book for franchisees to use as reopening guidance.

Last week, PYMNTS reported the grim news from OpenTable, the San Francisco-based online restaurant reservation service company, that 25 percent of U.S. restaurants won’t reopen due to the financial turmoil from COVID-19.

On Monday, President Donald Trump hosted a roundtable event with restaurant executives who asked the White House to extend the deadline to use their Paycheck Protection Program loan funds with full forgiveness from eight weeks to 24 weeks.

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