The food service industry spent most of 2020 recovering from the coronavirus pandemic, but poor sales worsened in the final month of the year.
According to the NPD Group, transactions at US restaurant chains were down 10% in December compared to the same period last year. The company tracks transactions in 75 restaurant chains that together account for more than half of the commercial restaurant traffic in the United States. By December, the monthly decline in restaurant transactions had been improving steadily since April. Transactions in November were only down 8%.
However, the industry's recovery has been hampered by a renewed spike in new Covid-19 cases, which led government officials to reintroduce strict food restrictions, and winter weather that has kept customers from dining outside.
The full-service restaurant segment is hardest hit by the pandemic. The sector, which includes Darden Restaurants' Olden Garden and The Cheesecake Factory, found it harder to focus on delivery and takeaway as indoor eating was banned. Unlike fast food chains, full-service restaurants are not known for their convenience, and their food is not designed for travel.
At its low point in April, transactions in the full-service segment fell by 70%. In December, transactions were only down 30%. A new wave of indoor food bans has hit personal sales. And take-out and delivery sales aren't enough to offset the decline in sales that resulted from fewer dine-in customers, according to the UBS Evidence Lab.
On the other hand, the fast food sector has recovered much faster. Until July, weekly transaction declines were in single digits. The segment benefited from previous investments in drive-through lanes, digital ordering and acceleration of service. And its great deals appeal to budget-conscious consumers who grow in numbers during a recession.
The NPD group only pursues restaurant chains. Bank of America consumer data shows that chain restaurants recover much faster than independent restaurants. Independent institutions typically do not have the same access to capital as chains. And while the federal government's paycheck protection program was created to help small businesses through the crisis, large chains like P.F. Chang & # 39; s and T.G.I. Friday swallowed up millions of funds.
The catering industry is pushing for more relief for bars and restaurants. Before the latest stimulus package was drafted, President-elect Joe Biden said he would support grants for restaurant loans. The House of Representatives passed a similar bill in October that gave the industry a lifeline of $ 120 billion. With the Democrats taking two Senate seats in Georgia this week, it's more likely than ever that restaurants could see this kind of help.