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Restaurant Industry: A Diary of the COVID-19 Impact June 3

Posted by Dave

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Memorial Day Hangover?

Memorial Day in 2020 fell on the earliest date it can be according to the calendar. And, given the softening of restrictions on restaurants in the two weeks leading up to the holiday weekend, it is no surprise that Memorial Day was a big hit! Sales jumped over 16% over the previous Monday, but was still down -45% from last year.

Screen Shot 2020-06-03 at 10.58.08 AM

You hear how numbers can be lead you to the wrong conclusion if not understood. An example of this is illustrated in the chart above on the day after Memorial Day. The chart shows sales were down -3.42% from the previous Tuesday, but what it doesn't show is that May 26 was the best day for sales compared to last year since the pandemic began. The sales this year were only down -41%, meaning the industry had almost 60% of the sales it had last year. That is good news.

However, the chart raises other concerns. What has happened to sales since Memorial Day? Since the end of March,  sales compared to the previous week have been steadily positive with only a few exceptions. But, the trend seems to be changing. It may be just the effect of the holiday, but any time you have a steady sales growth long enough (like April through May), it becomes tougher to beat last week's number. We may be seeing this effect in early June.

One thing is clear from the data, and that is the progress in sales is slowing down. The chart below illustrates how the data is still heading in the right direction, but at a slower pace. In this chart, we are looking at sales by Week compared to the same week last year. The steep drop off in March is obvious, then we begin the recovery. Early on you can see weeks that are 4-5 percentage points better than the previous week, but more recently, the improvements are 1-2 percentage points.

Screen Shot 2020-06-03 at 11.16.59 AM

The operating environment for restaurants is horrible for some operators, but within the Mirus client base, there is a growing number of companies that are experiencing sales greater than last year. In fact, more than 23% of our clients are in positive sales territory. Concepts with drive-thru service or pizza delivery are understandably doing well as a group.

But we also have fast casual concepts in positive territory, and that is harder to explain. My belief is that some fast casual concepts have successfully gotten outside of their concept's definition and found a menu that customers are attracted to, and a way of accessing the food that customers feel safe with. Congrats to those pioneers!

Please stay safe!

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Read the previous diary entry from  here. 

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About Mirus:

Mirus provides services in data management and solutions in custom reporting for the restaurant industry.

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Topics: Restaurant Profit, Restaurant Operations, Restaurant Finance, COVID-19 Restaurant Impact


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