Restaurant sales almost fully recovered in March
Photo courtesy of MOD Pizza
Restaurant sales jumped 36% year over year in March as consumers passed their stimulus checks, allowing the industry to almost completely recoup sales lost during the pandemic despite the limits capacity 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 slightly lower than the $ 62.7 billion in sales the industry recorded in March two years ago.
The incredible comeback of restaurant sales
Source: US 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 expected. be due to normal inflation rates.
Yet soaring 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 played out 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. Fast-paced, laid-back Italian chain Fazoli’s posted several weeks of record sales.
Many other chains saw their sales surpass 2019 levels.
“We’re past 2019,” said Scott Svenson, CEO of MOD Pizza, in a recent interview. “It’s on the positive side of our expectations. We expected a recovery. I wouldn’t say it totally took us by surprise. But it’s definitely positive. “
The improvement in sales can largely be attributed to two issues: stimulus and consumers tired of the pandemic.
People have become more confident about eating 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 a large part is due to the recovery and an improvement in the economic situation. Sales jumped 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.
“Stimulus checks have hit US wallets,” said Greg Flynn, founder of major franchisee Flynn Restaurant Group, in a recent episode of the Restaurant Business podcast “A Deeper Dive”.
“They basically take their stimulus checks, 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 what they spend in restaurants whether they are comfortable or not.
The sudden increase in sales was not without its headaches. A shortage of employees in the industry has caused problems at several restaurants, leading to short-term closures 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 pouches.
Still, the industry has come a long way from where it was a year ago, when sales tumbled in the second half of March and into April, when sales fell to unheard of monthly levels. since the late 1980s.