All 50 states have now partially emerged from coronavirus lockdowns. It seems hard to fathom in some ways, but Connecticut stamped the reality Wednesday when it allowed shops and restaurants to reopen their doors.
Of course, this doesn’t mean things are going to snap back. Denny’s, in one example of this strange, new world, is reopening with a “Sanitation Specialist” in each location—somebody who disinfects surfaces once guests leave the table. They wear an armband or vest and place a card on the table notifying new customers the area has been cleaned.
Welcome to table turns in a COVID-19 era.
From removing caddies and condiments to QR code options allowing people to pull up menus on their smartphones, the post-lockdown landscape isn’t going to resemble the one restaurateurs navigated for decades. Not even remotely.
And what we truly don’t know yet is how consumers will react to any of it. Will they be alarmed by caution tape stretched across tables to enforce social distancing? Can you truly deliver warm hospitality behind a mask?
These questions remain in front of operators as restrictions ease.
But let’s look at what recent data shows us. Black Box Intelligence’s latest snapshot shows continued slow-and-steady improvement for restaurants. In the week ending May 10, same-store sales declined 40 percent, year-over-year, across the industry. It marked a 5-percentage point increase from last week’s year-over-year performance and is nearly 20 percentage points than where the industry stood mid-April.
HOW REOPENINGS ARE GOING FOR DARDEN SO FAR
Limited-service restaurants are inching closer to flat performance. Comps fell just 6.5 percent this past week. And within the category, many of those classified as “quick service” even started to push significant positive growth in their sales versus 2019, Black Box said. The sector has posted two consecutive weeks of positive comp sales.
This provides weight to some sentiment shared by category giants lately—like Wingstop, Domino’s, and Papa John’s, which saw its highest sales month in company history in April at 27 percent. COVID-19 forced the hand of countless restaurants in terms of contactless upgrades, frictionless ordering, and the expansion of off-premises in general. So for those already moving in that direction, it accelerated customer counts.
For perspective, Wingstop welcomed roughly 40 percent of its sales via digital pre-coronavirus. It was up to 65 percent in May, with delivery jumping from low-to-mid teens of sales mix (Q4) to nearly 30 percent in April. For the full month, same-store sales hiked 33 percent versus 2019 levels.
Another wing chain—100-unit Wing Zone—saw comps spike 40 percent as it boosted profitability by shifting employees to self-delivery.
Where does the reopening of dining rooms fit into all of this? Not surprisingly, it’s provided a bigger boon to full-service restaurants—brands that, broadly, collected roughly 88 percent of their sales within the four walls before the pandemic.
RESOURCES:
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Black Box found same-store sales for full-serves declined 55 percent during the week ending May 10. At the national level, dine-in comps were negative 95 percent. The segments leading for dine-in are quick service (–88 percent) and casual dining (–91 percent).
Those numbers actually provide fuel for hope. Last week, dine-in comp sales for casual dining fell 97 percent. And you expect that trend to only improve as capacity limits expand.
Despite the dine-in sales growth, transaction data shows there remains a heavy appetitive for off-premises business. Customers are still looking to these channels, lockdown or not. It’s further proof not everybody is ready to get back to life as normal (or something closer to it).
Comp sales for off-premises grew 202 percent, year-over-year, during the week for full-service restaurants, Black Box said. It rose 31 percent for limited-service brands, which provides a window into why some chains are doing even better than they were last year. The customer pool tapping the services they tout and have invested in—delivery, takeout, etc.—is suddenly much larger and more willing.
But returning to the dine-in conversation and what impact reopenings have made to date, let’s circle casual dining. The top eight performing states during the week reflect the improvement in states that had dining rooms open. Overall same-store sales in those markets (Montana, North Dakota, Utah, Oklahoma, Tennessee, Georgia, Texas, and Florida) declined by an average of 34 percent. The rest of the country: Negative 52 percent.
Using the largest of these states as a sample (Tennessee, Georgia, Texas, and Florida), dine-in comps slid 68 percent for casual dining—23 percentage points above the national benchmark.
As dine-in sales picked up in reopened states, to-go business did slow a bit. Average to-go comps for these markets was 192 percent for the week ending May 10. The average over the last two weeks was 226 percent.
The question on most operators’ minds: Just how much will the scales tilt? Will dine-in business blossom alongside higher off-premises revenues? Or will one pull from the other? That conversation might change by the week.
PAST WEEKS:
Georgia Restaurants See a Sales Spike from Reopenings
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Reopenings have produced a real impact on another COVID-19 trend, too. In the aforementioned states, beverage sales mix improved dramatically, which has served as a major sales detractor during the pandemic for sit-down chains. Beverage comp sales for those four states averaged negative 67 percent during the week. It was down 95 percent at the national level.
That, of all the metrics so far, might be the most promising to emerge yet. Because it suggests if people are going to decide to eat out, they’re going to act like their old selves. Maybe even more indulgent in those early visits.
Some other points
Black Box also found Florida and Tennessee have seen the highest rates of consumers buying directly from restaurants, either through dine-in or takeout orders. Eight percent of consumers in Tennessee ordered food or beverages at a full-service restaurant during the week ending May 10 based on credit and debit card transaction data. Florida witnessed 6.5 percent for the same metric.
Does this signal the rise of first-party delivery again? It’s a notion bubbling near the surface. What’s happened for a lot of consumers is once they tired of cooking at home, they looked to their favorite restaurant for to-go or delivery, and so on. And in many cases, this was a restaurant they only saw through one purchasing lens before. So that restaurant now offering first-party delivery or curbside, etc., could influence sticky behavior down the line. Maybe this is a venue that got only one takeout order from a core customer throughout a year. Now, it might be 10 or 12. As Black Box’s data illustrates, the simple truth is more people are going direct to restaurants to look for off-premises options. In most cases, they’ve had no other choice.
Over the last four months, the restaurant industry experienced a sharp drop in total number of online reviews as well as in guest sentiment at the national level, Black Box said. The same is true in Texas and Georgia.
Additionally, although counts and sentiment are low, Black Box’s Guest Intelligence platform captured almost as many reviews during the first few weeks of May as it saw in all of April. “This shows excitement for restaurant spending but not quite evidence of a V-shaped recovery,” the company said.
Grocery sales are also holding steady, at about 15 percent. In the states that reopened dining rooms last week, full-service restaurant sales improving did not result in a decline in grocery business. The explanation being that while some consumers are starting to engage with restaurants more frequently, the shift has not been meaningful enough yet to damper grocery sales growth.
What also needs to be taken into consideration is how many restaurants are electing to remain closed, even when they don’t have to.
Womply, through daily analysis of credit and debit card transactions at 400,000 local businesses, including 47,000 full-service restaurants, 9,100 quick-serves, and 4,600 bars, compared the closure rate among venues on May 14 (over a week into reopenings) and April 30 (just before reopening) in states that eased shelter-in-place measures.
The closure rate represents the percentage of businesses that are closed or have otherwise not seen a debit or credit card transaction in at least three days.
Closure rate as of May 14
Full-service restaurants
- National: 29 percent
- Alabama: 25 percent
- Arizona: 22 percent
- Florida: 25 percent
- Georgia: 23 percent
- Kansas: 24 percent
- Oklahoma: 26 percent
- South Carolina: 20 percent
- Tennessee: 21 percent
- Texas: 24 percent
- Utah: 20 percent
Quick-service restaurants
- National: 20 percent
- Alabama: 17 percent
- Arizona: 16 percent
- Florida: 21 percent
- Georgia: 9 percent
- Kansas: 22 percent
- Oklahoma: 12 percent
- South Carolina: 6 percent
- Tennessee: 17 percent
- Texas: 12 percent
- Utah: 12 percent
Bars
- National: 61 percent
- Alabama: 24 percent
- Arizona: 57 percent
- Florida: 66 percent
- Georgia: 68 percent
- Kansas: 67 percent
- Oklahoma: 82 percent
- South Carolina: 28 percent
- Tennessee: 39 percent
- Texas: 76 percent
- Utah: 47 percent
Closure rate as of April 30
Full-service restaurants
- National: 34 percent
- Alabama: 36 percent
- Arizona: 28 percent
- Florida: 36 percent
- Georgia: 31 percent
- Kansas: 36 percent
- Oklahoma: 33 percent
- South Carolina: 33 percent
- Tennessee: 31 percent
- Texas: 28 percent
- Utah: 30 percent
Quick-service restaurants
- National: 23 percent
- Alabama: 19 percent
- Arizona: 24 percent
- Florida: 27 percent
- Georgia: 12 percent
- Kansas: 37 percent
- Oklahoma: 15 percent
- South Carolina: 10 percent
- Tennessee: 23 percent
- Texas: 15 percent
- Utah: 15 percent
Bars
- National: 66 percent
- Alabama: 58 percent
- Arizona: 63 percent
- Florida: 74 percent
- Georgia: 68 percent
- Kansas: 76 percent
- Oklahoma: 87 percent
- South Carolina: 56 percent
- Tennessee: 55 percent
- Texas: 76 percent
- Utah: 67 percent
Another way to look at reopenings
Buyers Edge Platform, a supply chain and technology company, analyzed purchasing data for more than 30,000 restaurants since the start of 2020. It said, as expected, overall orders plummeted in March, with the nationwide low occurring the week of March 22.
At that point, restaurants nationwide were operating at 32 percent of their normal purchasing capacity. Yet since then, orders have gradually ticked up, and currently sit at 46.6 percent of normal capacity.
Here’s a look at the worst week for each state compared to purchasing capacity as of the week of May 10. These markets have made the biggest comebacks, by that measure.
- Montana, jumping 241 percent since its low the week of March 29
- Oklahoma, up 176 percent since its low the week of March 22
- Arkansas, a lift of 153 percent since its low the week of March 22
- Tennessee, an increase of 149 percent since its low the week of March 22
- Wyoming, hiking 130 percent since its low the week of March 22
On the flip side:
- West Virginia, Rhode Island, and New Mexico, which actually experienced their shutdown lows in volume in the most recent week for which data is available, May 10
- Maine, rising only 3.46 percent since its low the week of April 19
- New York, up just 7.14 percent since its low the week of April 12
- Minnesota, rising 9.71 percent since its low the week of March 22
Even with serious improvements, this provides a snapshot into how much room remains to grow. Montana, at the top, still sits at 78.5 percent of normal purchasing volume.
Here’s a list of the states whose restaurant orders are at the highest and lowest capacity compared to normal purchasing numbers:
HIGHEST
- Wisconsin, whose restaurants are currently purchasing 81.20 percent of their normal volume
- Arkansas, at purchasing 78.70 percent of their normal volume
- Montana, 78.50 percent of their normal volume
- Wyoming, 70.60 percent of their normal volume
LOWEST
- Nevada, whose restaurants are currently purchasing 12.60 percent of their normal volume
- Maine, at 26.90 percent of their normal volume
- Hawaii, at 29.30 percent of their normal volume
- Connecticut, at 29.50 percent of their normal volume
- New York, at 30 percent of their normal volume
