Restaurants Remain Optimistic About Economic Recovery, Despite Consumer Hesitance

restaurant table

Restaurant recovery has not been the straight line upward that operators had hoped for. After a devastating 2020, the industry enjoyed a period of optimism in the early months of the vaccine rollout, when it briefly appeared that “back to normal” was an achievable goal. In fact, by May, spending was actually up from pre-pandemic levels, and Yelp reported that restaurant customers seated through its platform reached an all-time high in the same month. Now, though operators remain optimistic, there is cause to worry.

Read more: Mastercard: US Retail Sales Up 23.3 Pct; Restaurants See 2-Month Surge

Restaurant Seating At Record-High Rates, According To Yelp

A PYMNTS survey from the 2021 Restaurant Readiness Index, created in collaboration with Paytronix, found 69% of all restaurants are confident that their 2021 revenues will be equal to or greater than the revenues they generated two years ago, and 42 percent of them expect their revenues to increase compared to 2019. However, the delta variant is casting doubt on the extent to which this optimism reflects the reality of the situation.

Most consumers are steering clear of restaurants. Research from The Post-Pandemic Consumer at 18 Months: Spending Now, Worrying Later, in which PYMNTS surveyed nearly 2,500 U.S. consumers about the pandemic’s effect on their behavior, found that only 27% plan to eat out at restaurants within the next three months.

See also: Only 27% of US Consumers Plan to Dine Out Between Now and the End of 2021

This aversion to dine-in may, however, be offset by the rise of off-premises ordering. The Restaurant Readiness Index found that about two-thirds of all restaurants’ sales are being generated through off-premises channels. Unsurprisingly, this shift to off-premises is more pronounced for quick-service restaurants (QSRs) than for sit-down establishments, with the former generating three-quarters of all sales through these channels and the latter only around three-fifths of sales.

chart, restaurant sales

In the same vein, data from The Bring-It-To-Me Economy, a PYMNTS and Carat from Fiserv collaboration, which surveyed a census-balanced panel of nearly 5,270 U.S. consumers in Q2, found that consumers are now 31 percent likelier to eat their restaurant orders at home than they are to dine at a restaurant. Additionally, the study found 58% of consumers are ordering food online more often than they were before the start of the pandemic.

Still, the upward momentum that restaurants’ sales saw during the beginning of the vaccine rollout has hit a standstill. In August, the most recent month on record, U.S. Census Bureau data found that restaurant sales held flat relative to the month before. This stagnation marked a shift from the months beforehand — prior to August, sales had been on the rise since February.

One of the factors that may be stalling restaurants’ recovery is the issue of whether they must check for proof of vaccine, a damned-if-they-do, damned-if-they-don’t issue both in terms of the safety of the workers on premise and from an economic standpoint.

“There’s a lot of anxiety,” Andrew Robbins, co-founder and CEO of SaaS customer experience management solutions provider Paytronix, said of the current climate among restaurant operators in an interview with Karen Webster. “There’s anxiety from putting your frontline staff at risk, and you can put them at risk because of the delta variant. You can also put them at risk by trying to enforce this stuff.”

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A National Restaurant Association survey of 1,000 consumers conducted in August found that about one-third of respondents would be more likely to dine indoors if the restaurant required them to show proof of vaccination, whereas another third said it would make them less likely. Either way, restaurants stand to lose a significant portion of their customer base.