Restaurants are back. Spending at United States eateries is not only up 118.8 percent compared to 2020, but also up 5.7 percent compared to the same time in 2019, according to a press release from Mastercard emailed to PYMNTS. This surge can be seen in the wave of earnings releases from major restaurant brands in recent weeks reporting strong Q1 results.
On Wednesday (May 5), Dine Brands, which owns Applebee’s and IHOP, shared that Applebee’s comparable same-restaurant sales were up 6.1 percent relative to 2019 in the final month of the quarter and up 103.3 percent from 2020, and that IHOP sales were down only 12 percent compared to 2019 in the final month of the quarter, up 81 percent from 2020.
“We’re very encouraged by our Q1 performance, and we’re certainly optimistic that economic tailwinds will sustain us throughout 2021,” John Peyton, CEO of Dine Brands Global, Inc., said on a call with analysts. “Contributing to that view is historically high consumer savings, the federal spending that we’ve been enjoying as well as a new potential infrastructure bill … the unemployment rate is the lowest since the pandemic began, and with vaccinations rising, the economic growth outlook firming and the strength and resilience of our brands, I’m confident that we’ll build on the strong Q1 performance.”
Allison Hall, the company’s interim chief financial officer, vice president and corporate controller, added that this strong performance “reflects pent-up consumer demand for our brands” amid the vaccine distribution and the easing of dining room restrictions.
McDonald’s global comparable sales also surpassed 2019 levels, the company announced in April, and grew 7.5 percent year over year. The company attributes this strong performance in part to the recent round of stimulus checks, though it expects to maintain the gains going forward.
“The stimulus checks are now wearing off generally, but we’re seeing continued momentum in our business,” Joe Erlinger, president of McDonald’s USA, said on a call with analysts. “And … we expect our second quarter two-year stack to be roughly the same as our first-quarter stack.”
Kevin Ozan, McDonald’s executive vice president and chief financial officer, added, “We are seeing when we do reopen dining rooms, even in the U.S., that consumers are ready to come back to visit in the dining rooms and have some money to spend.”
Chipotle Mexican Grill similarly benefited from the return to dining rooms, with 23.4 percent year-over-year revenue growth to $1.7 billion.
“We’re definitely seeing [that] people want to be back in our dining rooms. You know, I’ve had the luxury of traveling recently,” CEO Brian Niccol told analysts. “And you know, [Chief Restaurant Officer] Scott [Boatwright] and I’ve been to numerous restaurants, and it’s great to see the lines again in our dining rooms. And, you know, we’re seeing a nice rebound obviously in those dynamic sales, because, you know, there weren’t any a year ago.”
Looking ahead, CFO Jack Hartung said, “Though impact from COVID appears to be lessening, we’re not quite out of the woods yet … and therefore, it’s still difficult to provide comp guidance for full-year 2021. But we’re encouraged by the strong start and we’re optimistic about our full-year performance in 2021.”
Del Taco, Yum! Brands, Brinker International, Restaurant Brands International, Starbucks and many more restaurant businesses also saw sales growth in the first three months of 2021. This is in line with what we know about U.S. consumers — one of the in-person experiences they miss most is in-restaurant dining. PYMNTS research from early in 2021 found that 61 percent of consumers were interested in eating out in restaurants more often than they currently do, with higher-income consumers the most eager to return. This indicates that as consumers trickle back into restaurants for on-premises dining, many will do so with disposable income that they are excited to spend on meaningful culinary experiences.
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