Restaurant sales recovered almost entirely in March
Photo courtesy of MOD Pizza
Restaurant sales jumped 36% year-over-year in March as consumers spent their stimulus checks, allowing the industry to almost fully recoup sales lost during the pandemic despite capacity limits and closures.
Food services and drinking places generated $ 61.2 billion in sales in March, up 13.4% from February, according to U.S. Census data released Thursday.
It was easily a post-pandemic peak. It was also down slightly from the $ 62.7 billion in industry sales in March two years ago.
The incredible comeback of restaurant sales
Source: United States Census
Admittedly, sales are still lower than they were just before the pandemic started a year ago – sales in February 2020 were $ 65 billion, for example – and still lower than they should. be taken into account for normal inflation rates.
Yet the surge in sales hit restaurants of all types last month. Patrons of a Raising Cane’s in suburban Minneapolis lined up twice around the restaurant and in the parking lot at 9 p.m. Wednesday, for example.
Such scenes have taken place several times in the past month. Casual restaurants had long wait times. Sandwich chain Firehouse Subs saw sales more than double for a few weeks in March compared to a year ago. Italian fast-casual chain Fazoli’s posted several weeks of record sales.
Many other chains saw their sales surpass 2019 levels.
âWe are up from 2019,â said Scott Svenson, CEO of MOD Pizza, in a recent interview. âIt’s on the positive side of our expectations. We expected a recovery. I wouldn’t say it totally took us by surprise. But that’s definitely on the positive side.
The improvement in sales can be largely attributed to two issues: the stimulus and consumers tired of the pandemic.
People have become more confident about dining out recently, thanks to the prevalence of vaccines and the easing of restrictions – a number of states, like Texas, have lifted the restrictions completely.
But this is largely due to the recovery and improvement in the economic situation. Sales surged soon after consumers started receiving checks for $ 1,400, which many Americans spent at restaurants. Investment bank Rabobank said it expects the stimulus to result in a 20-30% increase in restaurant sales.
âStimulus checks have hit US wallets,â said Greg Flynn, founder of major franchisee Flynn Restaurant Group, in a recent episode of the Restaurant Business podcast âA Deeper Diveâ.
âThey basically take their stimulus checks and walk into our restaurants and hand them over. It’s incredible.”
Indeed, restaurants appear to maintain their take-out sales at pandemic-like percentages, suggesting that customers have simply increased their spending in restaurants whether they’re comfortable dining out or not.
The sudden increase in sales was not without its headaches. An industry-wide employee shortage has caused problems at several restaurants, leading to short-term closings due to a lack of available employees. Delivery companies have also struggled to find drivers, as have distributors, leading to supply chain issues and shortages of items like pickles and ketchup packages.
Still, the industry has come a long way from what it was a year ago, when sales tumbled in the second half of March and into April, when sales plunged to monthly levels not seen since. late 1980s.
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