This article was written by Kristi Turner, CMO of Compeat
Summary: As we look at 2020 year to date, we see the COVID impact to restaurant sales in three distinct phases.
- COVID Phase I (Mar): The initial and dramatic -70% drop year over year in restaurant sales for our Compeat customers who stayed open and a -80% drop year over year across all Compeat customers.
- COVID Phase II (Apr to mid-June): The steady and slow rebuild of restaurant sales recovering to the -30% year over year sales level.
- COVID Phase III (mid-Jun): A second spike of COVID cases and restaurant sales growth year over year holding in the -30% for open restaurants to -50% for all restaurants through end of July.
The question on everyone’s mind is will this current phase stay stagnate and for how long or will we start seeing a second phase of growth in restaurant sales over the next few months.
Another way to see the three phases is to look at it from a week over week restaurant sales growth. The decline in Mar hit a low of -60% week over week. The steady growth in Apr, May and first half of Jun was encouraging. Mid-June to July we hit a -10% week over week growth. Since mid-July to first of Aug, restaurant sales growth has stabilized but holding just above 0% growth week over week.
The optimistic view is restaurants continued to hire back employees in July with over 502,000 jobs, according to QSR Magazine report, and the restaurant sales growth of Compeat customers since the rock bottom week of Mar 28th has been substantial. Although varies greatly by state from 83% to 600%, we see substantial growth in every state.
The cumulative increase of restaurant sales since our rock bottom week of Mar 28th through the end of July has averaged 257% nationwide with 11 states over 300%. Interesting observation, the highest restaurant sales growth states are not the lowest COVID cases as % of state population as one might think:
- Nevada at 600% growth with 1.83% COVID cases
- Minnesota at 525% growth with 1.09% COVID cases
- Wisconsin at 503% growth with 1.11% COVID cases
- Nebraska at 458% growth with 1.47% COVID cases
- New Jersey at 390% growth with 2.08% COVID cases
- Iowa at 383% growth with 1.55% COVID cases
- South Carolina at 357% growth with 1.95% COVID cases
- Alaska at 353% growth with .51% COVID cases
- Delaware at 335% growth with 1.31% COVID cases
- Oregon at 335% growth with .50% COVID cases
- Montana at 309% growth with .47% COVID cases
In July, we see closed locations among Compeat customers remains at an average of 20% compared to the worst week at -40% mid-March.
COVID cases by state vary between .23% to 2.83% of state’s population with Louisiana (2.83%), Arizona (2.57%), Florida (2.45%) and Mississippi (2.26%) as the highest states surpassing New York (2.17%) and New Jersey (2.08%).
August will bring yet another set of challenges for restaurants with back to school plans across the country potentially driving an expected increase in COVID cases especially among college campuses that may elicit another level of consumer retreat from restaurant dining. If there is one thing we have learned in 2020 is predictions are a waste of time, but we still believe our industry is one of the strongest and resilient industries and will continue to adapt as needed to survive.
You can find all the latest industry data and tips for best practices on our Compeat COVID-19 resource page.
Sources and Disclaimers: The source for COVID-19 cases data as a percent of population as well as reopen vs closed states is the CDC website as of 6.30.20. Restaurant sales data is derived from all Compeat customers across the United States as of 6.30.20. Compeat has customers across different types of restaurants from fine dining to fast casual to quick service. However, we are heavily weighted toward fast casual concepts. There are certain states that have less restaurant locations than others. As such, data shared above should be taken with the above considerations.