Skip to content

Restaurant industry sales experiencing slow recovery

May sales $27B lower than expected as only 16 percent of consumers dined on-premises

According to an economic update from the National Restaurant Industry, restaurant sales tallied in April were the lowest sales since1983. The industry-wide $29.9B, which was revised downward from a preliminary Census Bureau estimate of $32.4B (adjusted for inflation), is a new low point for eating and drinking places revenue. The broader foodservice industry has already lost $120B in the three months going back to May.

May sales totaled $38.6 billion on a seasonally-adjusted basis, based on preliminary data from the Census Bureau notes the Association. Despite the $9 billion increase from April, May reflected a $27 billion decrease from pre-coronavirus sales levels in January and February.

It’s not an easy road ahead, despite the ongoing lifting of restrictions. In a survey by foodservice consultancy Technomic during the last week of May, nearly half of consumers reported their state or county reopening dining services (49 percent) and 11 percent reported only their county reopening on-premises dining. Yet, of these groups, only 16 percent said they had dined at a restaurant, and only 17 percent indicated they would within the next week, while 44 percent indicated that they would not return to dining rooms any time soon.

Advertisements

Without a pandemic, May sales were more than 40 percent lower than what would have been expected based on unadjusted data. Typically, May sales at eating and drinking places is 5 percent higher than the average month. In fact, May is typically the strongest sales month for restaurants, according to the Association.

It also reports that between March and May, restaurants lost $94B in sales from expected levels. “Add in the sharp reduction in spending at non-restaurant foodservice operations in the lodging, arts/entertainment/recreation, education, healthcare and retail sectors, and the total shortfall in restaurant and foodservice sales likely surpassed $120B during the last three months,” wrote National Restaurant Association chief economist Bruce Grindy.

A focus on sanitation and communicating safety, investments in marketing and technology to implement contactless ordering and pickup, a continued focus on off-premises sales, and making the most of the on-premises guest experience are ways that restaurants will recover sales according to experts.

Advertisements

On a more positive note, data from Technomic shows that the average spend per 1,000 consumers per week in the last week of May was the highest since the start of the pandemic and COVID-19-related restrictions. That week, the spend of $41,104 far surpassed the $34,054 reported the week ending March 22. The last week of May was also 1 percent higher than the previous week.

Photo credit: Gardie Design (featured preview image)

About the publisher of this restaurant news site.

1 Comment »

  1. We can survive this crisis only if we make sure proper safety measures are implemented in not only dinning in but also while delivering to customers. Even I have experienced the rise of orders since May after the lifting of certain restrictions. Keep sharing such resourceful articles in the future.

    Like