Monthly Archives: December 2020

Staff at The Vineyard restaurant prepare food and drink for guests in accordance with social distancing guidelines in June. Photo contributed.

published on December 31, 2020 – 2:57 PM
Written by Business Journal staff

Across the country, among all types of restaurants, a new study shows spending on food and drink only declined by an average of 1% year-over-year, but a regional review of the data shows a more nuanced story.

Comparing the latter part of December to January (before the US pandemic restrictions), consumer spending at restaurants across states ranges from a 26% increase to a 47% decline, according to a press release citing data. by TOP Data and Zenreach.

John Kelly, CEO of Zenreach, said: “With the number of COVID-19 cases skyrocketing and with the return of more trade restrictions, it’s clear that we won’t be out of the woods for a while. The difference, however, between this recent wave of closures and those that took place earlier in the year is that we now have a better understanding of the formula for getting through this difficult time.

“If you can create a safe restaurant environment, effectively target your best customers, and maintain (or even increase) your marketing spend, the more likely you are to be successful in attracting customers to your establishments and to maintain your restaurant business during that time.” hard time. “

The data compared the last two weeks of December to January 2020. For more context, according to US census data presented by the National Restaurant Association, seasonally-adjusted $ 65.5 billion was spent last January in restaurants. bars and restaurants.

Data shows an average 29% drop in restaurant sales in California, the fourth worst in the country.

Idaho suffered the hardest with an average drop of 47%.

Washington state recorded the largest increase, recording a 26% increase in restaurant sales in the past two weeks compared to January.

The increases or decreases were not distributed evenly across restaurant types. TOP Data data shows a 56% increase in GrubHub sales from January 2020. Sonic showed a 42% increase in sales and Chik-Fil-A grew 23% in sales over the same period. . Meanwhile, Olive Garden’s sales were down 33%, Subway’s by 27% and Chile’s by 17%, the statement said.

Here are the top states that are currently spending more in restaurants than in January 2020, in terms of percentage increase:

Washington – 26%
Utah – 24%
South Dakota – 20%
Alaska – 19%
Alabama – 18%
Nebraska – 18%
North Dakota – 16%
Indiana – 15%
Montana – 15%
Kentucky – 14%
Delaware – 14%
Wisconsin – 13%

And here’s a list of states spending less on restaurants than in January 2020, in terms of percentage decrease:

Idaho – 47%
Massachusetts – 41%
Rhode Island – 34%
California – 29%
New Jersey – 24%
New Hampshire – 19%
New York – 18%
Connecticut – 17%
Florida – 11%
Michigan – 11%
Nevada – 10%
Pennsylvania – 7%

Sales in American bars and restaurants in November fell from the previous month as rising COVID-19 cases resulted in tighter restaurant restrictions and temperatures plunged across the country. Experts see tough conditions for restaurants persist for months to come.

Total jobs in food services and drinking places fell in November for the first time in months, raising doubts that the restaurant industry and its workers will recover anytime soon.

Meanwhile, shares of most of the biggest publicly traded restaurants rose in the month ended December 15.

Ringing and stumbling money

Sales of food services and drinking places in November fell 17.2% from the same period last year to $ 53.20 billion seasonally adjusted, according to advanced monthly estimates from the US Census Bureau published on December 16.

The decline in sales of food and beverage services in November on a year-over-year basis was worse than October’s 14.6% year-over-year decline and 14.3 decline % from year to year of September. On a monthly basis, November restaurant sales were down 4%, or $ 2.2 billion, from October, suggesting that the recovery in restaurant sales has not only stalled, but has likely fallen into a “downturn. double hollow, ”according to the National Restaurant Association.

All retail sales rose 4.1% from the period last year in November to $ 546.50 billion, which is better than the 3.3% growth in all sales in the United States. retail in November 2019. Retail sales for November were down 1.1% from the previous month.

The restaurant industry’s year-over-year comparable sales for the week ending November 29 were the worst on the industry since mid-July, according to the Black Box Intelligence report of December 11. . This is the third week in a row that year-over-year sales growth has declined from the previous week, Black Box said in its report. While most segments of the restaurant industry are struggling with negative same-store sales growth, quick service restaurants and quick-casual restaurants saw positive same-store sales growth during the week ending. on November 29, according to Black Box.

As winter sets in across the country, more and more restaurants are experiencing silent nights.

The onset of colder weather in the United States is likely one of the reasons for the sales decline, as fewer restaurants are able to offer outdoor dining, Black Box said. At the end of November, 52% of full-service restaurant operators said their restaurant offered alfresco dining on-site in spaces such as patios, terraces or sidewalks. This figure was down from 74% in early September. Limited-service restaurants are also withdrawing from their alfresco dining, dropping from 60% offering it in September to 40% in November.

“With the cold weathering much of the country, an increasing number of outdoor tables are empty,” said the National Restaurant Association.

New England, the Western region, New York and New Jersey are among the regions with larger sales declines, while warmer places like the Southeast, Florida, Texas and the Southwest have generally better comparable sales, according to Black Box.

As outdoor dining withers, the increase in coronavirus cases in the United States has prompted localities and state authorities to crack down on indoor dining, something the Centers for Disease Control and Prevention have linked to higher positivity rates for COVID-19.

As of Dec. 14, indoor dining had been suspended in 10 states and a number of populous cities like New York, Baltimore and St. Louis, with nine other states operating with indoor curfews, according to a December 15 report from Gordon. Jeff Farmer, analyst at Haskett. Indoor dining suspensions have negatively impacted traffic to restaurants, Farmer said.

California experienced one of the biggest sales declines for the week ending Nov. 29, likely due to a spike in coronavirus cases, Black Box said. The majority of California has been ordered to stay at home, which only allows restaurants to offer take out and deliveries. New York Governor Andrew Cuomo has banned indoor dining in New York City effective December 14.

Foot traffic and sales declines are expected to worsen for the remainder of 2020 and into early 2021 as the pandemic worsens in the United States and the number of indoor meal suspensions or covers. fires are increasing, Farmer said. It is difficult to say whether optimism about the vaccine rollout will outweigh the growing challenges in the near term, Farmer said.

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The number of diners sitting in the United States was down 72.4% year-over-year on December 15, an improvement from lows in March and April, but down from the worst day in November on November 30, when the number of diners seated was down 66% from a year ago, restaurant reservation platform OpenTable was reporting.

Job losses

After six months of consecutive monthly job gains, the restaurant industry shed jobs for the first time since April.

Food services and drinking places lost 17,400 jobs in November for a total of 10.19 million jobs, 16.4% less than a year ago. Food services and drinking places also held 10.21 million jobs in October. Food services and beverage sales remained at 2.1 million jobs behind pre-pandemic levels, the National Restaurant Association said. Half of restaurateurs expect their workforce to decline in the next three months, and only 5% of restaurateurs plan to increase their workforce in the next three months, according to a National Restaurant Association survey in November. .

“There does not appear to be a significant catalyst for a resumption of restaurant job growth in the immediate future,” the National Restaurant Association said in a Dec. 4 report. “With increasing restrictions on indoor dining and the likelihood of drastically reduced holiday celebrations, trading conditions will remain extremely difficult over the next few months.”

Stocks are heating up

According to S&P Global Market Intelligence, fourteen of the top 15 US-listed restaurants posted gains in their shares in the month ended Dec. 15. More generally, the S&P Composite 1500 Restaurants sub-index rose 4.6% and the S&P Composite 1500 index jumped 3.6%.

Shares of Chili’s Grill & Bar owner Brinker International Inc. rose 16.6% for the month ended Dec. 15, the largest increase in the period. Chile’s comparable sales and traffic have been better than the overall casual dining industry, Stephens analyst James Rutherford said in a Dec.16 report. Brinker, which also owns Maggiano’s Little Italy, withdrew its fiscal guidance for the second quarter of 2021 on Dec. 16 as its restaurants are affected by dining room closures and capacity restrictions. Chili’s had positive traffic in October, but restrictions in response to the increase in COVID-19 cases will prevent Brinker from realizing his plans for the quarter, Wyman Roberts, CEO of Brinker, said in a press release.

Brinker reported on Dec. 16 that comparable sales of Chili’s, owned by the company, fell 1% for the month ended Oct. 28. The figure was down 3.9% for the week ended Nov. 4 and has worsened every week since. Comparable sales of the company-owned Chili’s were down 12.3% for the week ended December 9.

Shares of Domino’s Pizza Inc. fell 1.3% for the month ended Dec. 15, the biggest loss for the period. The pizza chain announced on December 14 that it would give more than $ 9.6 million in special bonuses in December to hourly workers and drivers in its company-owned stores and supply chain.

Vulnerability

The odds of publicly traded restaurant companies defaulting on debts within a year are little changed from the previous month.

A December 15 analysis of the one-year probability of default scores identified 15 US public restaurants with scores ranging from 10.4% to 24.1%, and corresponding implicit credit scores of “ccc-” to “ccc +”, according to data from Market Intelligence. By comparison, the same analysis performed on November 17 also showed a range of 10.4% to 24.1%. The analysis is based on the business, industrial and financial risks of each company and is mainly based on data published through public documents.

Two of the three public catering companies estimated most likely to default were the same as those in the previous month’s analysis.

Potbelly Corp. Again had the highest odds with a 24.1% chance that she would default in the next 12 months, the same odds she might in the previous month’s report. Potbelly did not respond to a request for comment.

Noodles & Co. again had the second highest probability of default over the next 12 months at 21.2%, the same figure as the month before. Noodles did not respond to a request for comment.

S&P Global’s Fundamental Probability of Default Model provides a fundamental view of credit risk for businesses by assessing both business risk – including country risk, sector risk, macroeconomic risk, business competitiveness and business management – as well as financial risk, such as liquidity, profitability, efficiency, debt service capacity and leverage. For a more in-depth look at the model, see the Fundamentals of the PD model – Public enterprises white paper.