It’s no secret that the restaurant industry has been hit hard by COVID-19 and it will take a significant amount of time for many to bounce back to normal levels under ongoing restrictions. In fact, many thought that the combination of the pandemic and already struggling brands could signal serious problems for sit-down chains.
But, as regulations continue to lift and more restaurants slowly open back up, the picture was more positive than expected. So, we dove into the data surrounding certain restaurant chains to analyze their May recoveries to tease out any critical changes.
Pre-COVID Performance
When analyzing four chain restaurants nationwide, Chili’s, TGI Fridays, Perkins and Olive Garden, and looking at each of their pre-COVID performances, we see a positive trend. While two restaurants, Perkins and TGI Fridays, saw year over year declines for January 2020, each restaurant measured increased by at least 4.0% for February 2020. This was driven by both a Leap Year February and a boost that many businesses saw in the immediate weeks before stay at home restrictions came into place.
But Chili’s and Olive Garden saw significant jumps to kick off the year as well. Olive Garden, arguably one the most popular Italian chains, posted a 13.3% year-over-year increase for February, while Chili’s came in a close second with nearly 10.0% increase in visits.
However, as coronavirus took hold in the US around mid-March, visits declined drastically and fell to basically nothing by April as full closures and additional restrictions were implemented across the country. While some of these brands were supported by takeaway or delivery options, the offline hit was significant.
But, as the economy began to reopen we did see visits slowly inching back towards ‘normal’ levels in May. Each restaurant increased its visits by at least 10.0% in May compared to the month prior. Again, Chili’s and Olive Garden led the way with increases of 27.1% and 21.1% respectively, while Perkins and TGI Fridays generated visits that were 16.5% and 10.9% higher than those in April. So while it is clear that a recovery is in process, the pace matters significantly.
Rate of Recovery
When looking at weekly data year over year, we see just how resilient consumer demand has been, as visits for these restaurants have shot up drastically and have continued to show positive growth. Each restaurant measured has seen improvement in terms of year-over-year change, from April 27th to the first week of June. Although numbers are still extremely low, visits for each of the restaurants have been inching back to ‘normal’ levels.
If we look at the data for the week of May 25th we see visits for Chili’s and Olive Garden pushing closest to normal levels with traffic being down just 46.4% and 53.7% respectively. TGI Fridays and Perkins were the farthest away from pre-COVID levels with year over year weekly growth of just 74.2% and 68.3%. Even with a shortened week that saw many restaurants being closed for Memorial Day, the growth increased from the previous week of May 18th. The week that began June 1st generated the most impressive numbers for every restaurant for the measured period. Again, Chili’s and Olive Garden led the way with 38.5% and 49.1%, while TGI Fridays and Perkins followed a bit farther behind with 68.3% and 59.4%.
With continued year over year weekly growth, It’s clear that the restaurant industry is well on its way to a recovery. Looking at the overall dining sector has also continued to show weekly improvements year over year change numbers and the economy has begun reopening. And although many states still have tight restrictions surrounding the restaurant industry, the nationwide trend shows a very strong outlook.
Takeaways
Not only have most people been stuck inside, but they’ve also been missing out on their favorite food, so the dining sector is poised for a strong comeback with customers pining to get out of their homes and back to their most-loved restaurants.
Will restaurants get the surge they need from their loyal customers in order to sustain this positive outlook? Check back in with Placer.ai to find out
