Market Overview

Surveys, Stats Paint Difficult Environment For Restaurant Industry

Surveys, Stats Paint Difficult Environment For Restaurant Industry

The coronavirus outbreak has wreaked havoc on several industries. One in particular is starting to get hit hard.

Seven out of 10 restaurants surveyed by Black Box Intelligence highlighted a decline in traffic, while OpenTable's data notes restaurant traffic is down 48%.

BlackBox: Survey Before Peak Concern

BlackBox's survey was conducted throughout the week ended March 14, which was prior to municipalities and other governments enacting strict guidelines, according to Nation's Restaurant News. More than 80% of companies had already paid some form of sick leave to management and corporate staff, but only 41% of those surveyed offer a paid sick leave option to hourly workers.

"Many restaurants were already preparing for a potential escalation of the threat the virus poses to the industry," Black Box said. "By March 13, 60% of restaurant companies that completed the survey said they had already established contingency plans for potential restaurant closures."

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OpenTable: Reservations Down Worldwide

OpenTable's community of close to 60,000 restaurants is facing "unprecedented challenges" and the online reservation company pledged to continue sharing its data and insights to support the industry.

Data as of March 18 shows total reservations across U.S. restaurants are down 91% versus the same week last year. Global reservations are down 89% over the same time period.

Will The US Government Bail Out Restaurants?

The restaurant industry could see a major disruption in the coming weeks and months if the U.S. government doesn't provide "aggressive action," The National Restaurant Association wrote in a letter to U.S. leading officials. The industry as a whole stands to lose $225 billion worth of sales over the next three months alone and up to 7 million people could lose their jobs.

As such, the National Restaurant Association is asking the Trump administration to approve a $145 billion Restaurant and Foodservice Industry Recovery Fund.

The restaurant industry held a conference call with Trump on Tuesday and was open to some form of support. A source close to the call told CNBC Trump said, "I think you're really going to like what we're doing."

Potential Input Shortage

Consumers are purchasing in large quantities shelf-stable foods and beverages, most notably powdered milk products where sales were up 84% during the last week of February, according to Food Business News.

Food companies continue to say they're able to handle demand and many retailers are opting for regional sourcing. But the Consumer Brands Association said in a March 15 letter that efforts by other countries to curb their exports of food inputs could result in potential shortages in the U.S.

But well-financed companies who rely on local inputs are more likely to weather any potential storm.

Related Links:

How Trump Is Handling The Restaurant Biz Amid Coronavirus Outbreak

Online Grocers Struggle To Keep Up With Demand Amid Coronavirus


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Posted-In: Black Box Intelligence coronavirus Donald TrumpNews Retail Sales Restaurants Media General Best of Benzinga

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