How Restaurant Sales Reacted To 7 States Completely Lifting Seating Capacity

A total of seven states removed all COVID-19 pandemic seating restrictions for restaurants, which imply seating capacity returned to 2019 levels. Early data compiled by RBC found outperformance versus states that still have some form of restriction.

What Happened: Arizona, Connecticut, Texas, Maryland, Mississippi, West Virginia and Wyoming lifted restaurant restrictions, but the changes are very recent, RBC analyst Nik Modi wrote in a note, adding that some of these states were previously operating at 75% of total capacity, and it was likely many restaurants "pushed that limit."

Nevertheless, the average year-over-year change in sit-down restaurant reservations improved by 5.4 percentage points from the day before the seven states' official announcements of a change through March 11. By comparison, the U.S. as a whole showed a 2.2 percentage point improvement from Feb. 28 through March 11.

Related Link: Denny's Stock Gets Upgrade As More Restaurants Reopen

Why It's Important: While it may seem obvious that more available seats in a restaurant translate to more diners, the favorable restaurant trends are part of improving consumer sentiment. It is also encouraging to note consumers can dine out safely and aren't being judged for doing so, Modi wrote.

What's Next: March marked the first time in a year state-authorized restaurant owners could welcome guests back with no restrictions, Modi wrote. However, many of the changes came into effect in recent days so it is "too early to make any real conclusions."

Nevertheless, the industry has seen a sharp acceleration in reservations from down 56% year-over-year on Dec. 31 to down 37.6% on March 11.

(Photo by Elevate on Unsplash)

 

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Posted In: Analyst ColorRestaurantsAnalyst RatingsGeneralCoronavirusdiningIn Door DiningNik ModiRBC Capital Marketsrestaruants
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