Comp restaurant sales could signal bottom of rabbit hole: Black Box May report

Comp sales plunge 55 percent but worst may be in rearview mirror

Comparable U.S. restaurant sales dropped 55 percent in April, further showing the impact of COVID-19 on the industry, reported Black Box Intelligence. Comparable (comp) traffic also plunged 55.3 percent. Fine-dining and family-dining were hit hardest. The report from the data-analytics firm suggests that the worst of the erosion of sales due to the health crisis may be behind the restaurant industry as businesses start to reopen.

Quick-service restaurants (QSR), including fast casual and fast food, have been more resilient in weathering the storm. QSR benefits from being known for its drive-thrus and off-premises orders, so this helped ward off some health crisis fallout as consumers sheltered at home.

All 196 markets posted negative comp sales. The Southeast reported the strongest comp sales, down “just” 43.3 percent, with traffic down 45.4 percent. The weakest market, New England, posted the worst comp sales, down 63.4 percent. Comp traffic there was down 63.9 percent. According to Black Box sales, New York-New Jersey, California, the Western region, and New England were impacted the greatest. These markets were the same ones that had a tremendous spread of COVID-19.


Off-premise comp sales rose more than 200 percent, but that is not nearly enough to recoup the amount of in-restaurant dining business that restaurants lost. Considering a typical restaurant might derive 10 to 20 percent of sales from off-premise, these types of sales would have to increase by at least 300 to 400 percent to be nearly enough. Off-premise alcohol sales have also led to a small sales improvement.

The long road ahead

According to Black Box, a more material industry-wide uptick in sales will surface when restaurants reopen. Preliminary data from from Texas and Georgia shows comp sales lift of almost 30 percentage-points for the markets, even though only 40 percent of Texas locations and 31 percent of Georgia restaurants have reopened dining rooms thus far.

“As bad as the results were in April, the latest Black Box Intelligence data suggests that the worst of the sales decline is behind us and we are now starting the long road towards recovery,” said Victor Fernandez, vice president of Insights and Knowledge for Black Box Intelligence. “During the last two weeks of March restaurants lost 67 percent of their sales year over year, but since then the decline in same-store (comp) sales improved by 20 percentage-points. By the last 2 weeks of April sales decline slowed down to 47 percent year over year.”


Different segments have navigated the rough terrain differently:

  • Limited-service fast food – much more accustomed to off-premises sales and by the last week of the month, was down only 2 percent from last year
  • Fast casual – down by 30 percent by the last week of the month, a 20 percentage-point improvement from the end of March
  • Full service – still reporting a comp sales drop of 62 percent, but this shows an improvement of 15 percent-points from where they were one month ago

A word about the economy

The future of the economy is quite uncertain. A short-term recovery is premised on whether consumers will return to retail, food businesses and workplaces—whether they have that comfort level and also whether the return of businesses will cause a resurgence of COVID-19 cases.

“The unemployment rate remains on target to reach the 20-percent range,” said Joel Naroff, president of Naroff Economic Advisors and Black Box Intelligence economist. “But businesses are starting to reopen, though slowly and extremely unevenly. There doesn’t seem to be a uniform plan that states and localities are following to determine what should be opened and when. That means the process of reopening the economy will not be smooth and is likely to take many months.”

Black Box Intelligence, formerly TDn2K, sources its data from over 50,000 restaurant units, accounting for $75B in annual sales.

Photo credit: Omar Rodriguez

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