This article was written by Kristi Turner, CMO of Compeat
A year in review gives a truthful assessment of how the COVID global pandemic has impacted restaurant sales of Compeat customers. It is fascinating to see the phases of impact between Mar 2020 to Dec 2020, very much aligned with nationwide data that Black Box Intelligence reports here.
There are dramatic differences by state and by top metropolitan cities that make it difficult to make any strong correlations but lead you to believe it is a unique combination of cultural differences of opinions on COVID, local government restrictions, number of cases, weather differences and general consumer fear levels.
The graph below shows year over year restaurant sales for all Compeat restaurant locations that have remained open. In December sales declined and are now at -44% year over year, a disappointment after the recovery in previous months had reached a low of -22% year over year sales.
We have broken the year out into six phases:
- First hit comes in March, Rock Bottom Phase which shows the dramatic drop in sales to -69% year of year and closed locations hit and all time low of 45%.
- Recovery Phase I carried us through June with strong week over week sales growth hitting -28% year over year sales and closed locations dropping to 22%.
- COVID Phase II in July saw a slowed recovery as consumers feared the worst.
- We were all pleasantly surprised to see Recovery Phase II carry us through August to an all time low of -22% year over year sales and closed locations averaging 20% during this time.
- Most of Sept and Oct just showed us a slight decline but mostly stagnate stats for sales and closed locations.
- In Nov and Dec, we witnessed our COVID Phase III hit with a dramatic increase in cases across the nation and restaurant sales declining to -44% and closed locations settling at -23%. It has been quite a ride.
Looking a little deeper at top metro cities across the country, the differences are even more astounding. In Nov and Dec, LA and SF were hit harder than any of the other metro cities, somewhat expected given the strict local ordinances and significant rise in COVID cases. The remaining cities in order of most significant sales decline are NYC, Seattle, DC, Phoenix, Austin, Atlanta and then Miami which actually had growth during Nov and Dec.
COVID cases as a percent of state populations still varies dramatically across the country but are not aligned directly with restaurant sales recovery:
- Georgia, Texas and California all have ~6% of population with COVID cases yet have dramatically different restaurant sales recovery stats since Mar 2020 with 378% (GA), 119% (TX) and 79% (CA).
- North and South Dakota are leading the country at 12% and 11% of the population with COVID cases and they are experiencing 196% (ND) and 226% (SD) in sales recovery.
- States with the higher ranges of 8-9% of COVID cases include Wisconsin, Iowa, Idaho, Nebraska, Rhode Island, Tennessee and Utah.
- A few states still fall around the 2% or lower range of COVID cases including Vermont, Maine, Hawaii and Oregon.
- States with the highest positive restaurant sale recovery >500% include Hawaii, Nevada, New Jersey and Wisconsin.
- States with the lowest restaurant sales recovery since March 2020 include Washington, New Mexico, Michigan, Illinois and California all <100%.
Top concerns continue to be unpredictable and inconsistent government restrictions on restaurants, cold weather and cashflow getting tighter as rough times continue month after month. Restaurants are beginning to fight what some perceive as unfair restrictions on restaurants compared to other retail establishments and demands for government relief continue by industry organizations. The PPP Second Draw opened up on Monday and we will see how much restaurants will benefit or not benefit from this wave of government support.
Restaurant operators are some of the most resilient humans in our country and continue to adapt, innovate and fight for their business. Looking at menu, recipe, labor and shift profitability, and streamlining has become a daily exercise for most of our customers. We stand by their side to help identify alternative operation strategies, critical business intelligence reports for COVID and sharing best practices for labor and food cost management.
With vaccine distribution beginning, there is a new level of hope that the worst is behind us and 2021 will bring a strong recovery phase. Until then, I will choose to hold on to my favorite quote from 2020 I picked up from Restaurant Hospitality article, “The year that was the year to come: Nancy Kruse and Bret thorn reflect on the state of the restaurant landscape:”
“UCLA Anderson published in early December (2020), which suggested that post-vaccine and by summer, we’ll see the onset of a whole new Roaring ’20s, a recovery buoyed by massive pent-up demand. The economists noted restaurants among major beneficiaries of the boom.”
Let’s let the roaring ’20s begin in 2021.
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 12.31.20. Restaurant sales data is derived from all Compeat customers across the United States as of 1.02.21. 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.