FEBRUARY 1-14: VALENTINE’S DAY AND PRESIDENTS DAY GIVE NATIONAL RESTAURANT SALES A BOOST
Published 2.22.21
Index at a Glance
- All Avero Index: Sales up 9%, open units up 3%
- Midwest: Sales up 6%, open units up 2%
- Northeast: Sales up 7%, open units up 4%
- South: Sales up 7%, open units up 1%
- West: Sales up 12%, open units up 4%
National Restaurant Performance
National restaurant sales jumped 9 points over the first two weeks in February. Two of those points were in the first week with the remaining 7 gained in the second week which coincided with both Valentine’s Day and President’s Day weekend.
With Mardi Gras celebrations wrapped up and a rapidly declining Covid-19 infection rate taking hold, we’re optimistic about February’s sales outlook.
The rolling daily average of new infections reached a new high on January 12 according to the Washington Post. Since then, the number of new infections has continued to fall. On Sunday, it was at the lowest level we’ve seen since November. This is a great indication that the largest surge of the virus that began over the Thanksgiving and Christmas holidays is finally coming to an end. While there is still a chance that we could yet see a fourth wave, the acceleration of the vaccination program, along with warmer temperatures on the horizon are promising.
Regional Restaurant Performance
The Western region was the clear winner in our regional sales snapshot this month. Sales in the West rose 12% with an accompanying 4% increase in the percentage of open units. Thanks to a January 25 state order that lifted a ban on all on-premise dining in California, the region was poised to take advantage of February’s holiday events with outdoor seating.
According to the California Restaurant Association, one million Californian restaurant workers have been laid off or furloughed since the pandemic began. In a survey of 396 restaurant owners in the state, 30% say they’re at risk of closing or downsizing. In December alone, the hospitality sector lost 117,000 jobs, primarily in food service. Let’s hope Covid numbers continue falling and restaurant sales in the West continue recovering in earnest.
The Northeast finally saw a sizable sales increase in the first half of February as well. Sales grew 7% in the region, their biggest increase since Christmas. Current sales levels reflect what we saw in the Northeast in early November before New York Governor Andrew Cuomo instituted a curfew that evolved into a ban on indoor dining in December that lasted through last Sunday. Indoor dining has returned to the city at 25% capacity, just in time for many outlets to capitalize on Valentine’s Day.
Virus positivity rates vary widely throughout different neighborhoods in the city, but the overall rate is on the decline. This is good news for NYC’s restaurateurs who have been struggling with the strict regulations on the industry for a year. In January, Cuomo proposed $50 million in tax credits in the 2021 budget specifically for the state’s restaurant industry. The plan is part of a larger effort to help bring jobs back to the state.
Sales in the Midwest grew 6% in early February with 2% growth in the percentage of open units. The Midwest has consistently fared better than the other regions in terms of the percentage of open units since the pandemic began in March 2020. Sales in the region are 53% lower than normal YoY—only two points behind the Southern region.
Sales in the South have gained another 7% in February, coming in at 51% below normal YoY. That keeps them in the number one spot in terms of performance among the regions. Their current performance is 7% lower than it was at its pandemic peak over New Year’s Eve. But still a full 10 points higher than the Northeast’s best performance since the pandemic hit which was in early October when restaurants were still open for some indoor dining.
Will restaurant sales continue their upward climb as Covid numbers decline? We’ll let you know when we update the Index again at the end of February. Cheers!
FEBRUARY 15-28: RISING SALES, SHRINKING INFECTIONS AND FEWER RESTRICTIONS BRING HOPE TO RESTAURANTS
Published 3.5.21
Index at a Glance
- All Avero Index: Sales up 3%, open units up 1%
- Midwest: Sales up 5%, no change in open units
- Northeast: Sales up 4%, open units up 1%
- South: Sales up 5%, open units up 1%
- West: Sales up 4%, no change in open units
National Restaurant Performance
Restaurant sales across the US grew once again in the second half of February. Sales are up 3% from two weeks ago. The month of February closed 10 points higher than levels reached in January. The percentage of open units is two points higher as well.
Steady gains in the restaurant industry are a most welcome sight. With the peak of the winter pandemic firmly behind us, falling Covid-19 infection rates across the country, and warmer weather taking hold, we’re more optimistic about the path forward than we’ve been since the start of the pandemic.
NPR reports that new infections have fallen nearly 70% in the past six weeks. Hospitalizations have fallen close to 60% since the peak in January, and the national test positivity rate has fallen from 13% to less than 5% currently. By all accounts, the trend is overwhelmingly positive.
Regional Restaurant Performance
Sales gains were spread out evenly amongst the regions for the second half of February. The Midwest and South saw a 5% increase in restaurant sales. The percentage of open units rose 1% in the South. There was no change in the percentage of open units in the Midwest.
Sales rose 4% in both the Northeast and the West. Open units grew 1% in the Northeast, and there was no change in units in the West.
The intense winter storm that hit Texas on Valentine’s Day slammed restaurants in the area with more hardships. The rolling power blackouts left millions of Texans without power or heat for days. Freezing temperatures and the lack of potable water made it impossible for many restaurants to open for several days. In addition to losing lucrative Valentine’s dinner revenue, restaurants also bear the costs of food spoilage, flooding due to broken pipes, and skyrocketing utility rates.
Last week, Texas made headlines yet again when Governor Greg Abbott announced plans to lift all Covid-related business restrictions and the state’s mask-mandate on March 10. The state left a caveat in place that in regions where Covid hospitalizations rise above 15% of total hospitalizations over a 7-day period may implement mitigation strategies including masks and dining capacity restrictions.
The move was met with disapproval from the CDC due to the increase in more aggressive virus variants and the slow progress of the vaccine program. Only about 6% of Texans are currently vaccinated and hospitality workers are not being prioritized as they are in many other states.
Still, many restaurants rejoiced at the opportunity to resume full capacity indoor dining. Operating with no restrictions gives many hope for recovering lost revenue from the pandemic at large, and the recent winter storm specifically.
Mississippi also announced the end of Covid-related restrictions. Like Texas, Mississippi is also seeing a rise in the number of new infections in the state, though levels remain far below the January peak. According to this USA Today map, infections are on the rise in many states including Colorado, Maine, Pennsylvania, New Jersey, Minnesota and Arkansas. But infection rates are down in the majority of states.
Reopening plans are on hold in Washington, Wisconsin, Indiana, Alabama, and Georgia. West Virginia is currently tightening restrictions. All the remaining states are in the process of or have plans to ease Covid restrictions.
Falling infection rates, accelerating reopening plans, and warmer temperatures are finally coming to fruition. For our beloved hospitality industry, hope springs eternal.
