Restaurants have continued to stagnate, averaging approximately 59% for the last three weeks. While I initially postulated in last week’s article that restaurant reservations could be on the rise again, it appears that they haven’t increased at all. Reservation numbers do, however, operate on a cycle throughout a typical week, with a gradual incline up to the weekend, followed by a sharp drop on Monday. It seems that the uptick in COVID-19 cases has made some customers cautious about returning to dine-in.
Casual Dining, Fast Food, and Bars
Restaurant foot traffic presents an even grimmer tale this week—steadily dropping another 4.5%yoy for both casual dining establishments and bars. While fine dining establishments have simply leveled off due to the resurgence of U.S. cases, it seems customers are shying away from less lavish establishments. Fast Food Remains un-affected.
Restaurant Reclosures by State
Restaurants and bars are being re-closed after a spike in COVID-19 cases. This is a comprehensive list of states that have re-closed or restricted their restaurants as of July 13th. To see details about how the states are re-restricting their restaurants, click this link to see the full article by Elazar Sontag.
In the news
[Alamo Biscuit Co.] in Texas shared footage online of a new device that was installed at its entryway. Employees and guests at the restaurant can choose to walk through a customized disinfectant spray portal either before entering or when they leave the business (or both).
“So far, they are liking it,” Vale told ABC 13. “We have customers that are using it as they come in, and then they use it as they go out. And of course, it’s optional. We don’t require our customers to use the portal. It’s up to them, completely up to them.”
A report from S&P Global Ratings released on Friday identified 15 publicly traded restaurant chains that are most likely to default. Kisses From Italy, a casual dining chain whose shares are trading for 10 cents, topped the list, with a 41.2% chance of defaulting within the next 12 months. Muscle Maker, with a 36.9% chance of default, and Giggles N’ Hugs, with a 34.3% chance, came in second and third place.
Trade groups estimate that up to 30% of restaurants could permanently close because of the pandemic. While independent restaurants are more at risk, dining room closures and consumers eating more at home has also strained chains, particularly those in the casual dining sector.