One Year Of COVID: How Have Restaurants Fared
FAIRFAX, Va., March 10, 2021 /PRNewswire/ -- As the nation marks the one-year anniversary of the COVID-19 pandemic, the leading restaurant management software provider, MarginEdge has released an industry performance report assessing the state of restaurants at this pivotal milestone. MarginEdge analyzed sales and operational data from close to 2000 restaurants in 47 states to assess how one of the hardest hit industries fared over the last twelve months.
The full report found here, relies on data from a large and diverse sample set and illustrates just how catastrophic this pandemic has been on restaurants. Some key takeaways:
- Sales Experienced a Catastrophic Dropoff. Restaurants experienced a 66% drop in sales by March 22, 2020, when most of the country was under strict lockdown. While the industry has faced recessions in the past, a contraction this precipitous had never before been seen. For comparison, the S&P fell 28% between February 19 and March 25, whereas the economy contracted at a pace of 31.4% in the second quarter, the worst the government has seen since record keeping began.
- The Delivery Pivot. Pre-pandemic, delivery sales from third party partners represented just 7% of restaurant revenue. At its peak, this portion grew to almost a third of sales, an increase blunted by high delivery commissions. While this share of sales will decrease as the pandemic subsides, it is not expected to return to pre-pandemic single digit levels.
- Survival of the Fast Casuals. Fast casual restaurants outperformed their full-service counterparts as they were best equipped to adapt to take-out and contactless features. The worst sales day for fast casuals saw a 62% drop in year-over-year sales, whereas the same measure for full-service restaurants saw an almost 84% decrease in sales. Weather and optimized outdoor dining helped full-service operators close this gap during the warmer months.
- A Tale of Four Regions. One of the most volatile trends is seen in a graphic of sales broken down by region: West, South, Northeast and Midwest. By the fall months, each region coalesced around a 15% drop in year-over-year sales. Outdoor dining and relaxed restrictions directly affected each region, with the South largely buffered by weather impacts and looser restrictions.
- Sluggish Restaurant Recovery. While holidays like Easter and Labor Day provided sales bumps, restaurant recovery remained sluggish months into the pandemic. Three months after hitting the lowest point, the 7-day moving average for sales was down 26.46% in June and six months after, was still down by 17.59%.
“As a restaurant owner-operator who is also a restaurant tech CEO, I spent this last year with a very unique vantage point as I watched what happened to our industry,” said Bo Davis, MarginEdge CEO and founder. “I thought about the questions that would help me navigate as a restaurant owner, and then immediately how MarginEdge’s data could answer those questions for other operators around the country,” he continued. “Operationalizing our data to empower restaurateurs is at the center of what we do – this was true over the last year weathering the storm – and it will be equally important as we begin to rebuild.”
NOTE: Media interviews and details on research methodology are available upon request.
MarginEdge’s mission is to create a world where restaurant operators can focus on the business they love. By using best-in-class technology to eliminate unproductive paperwork and streamline the flow of operational data, MarginEdge is reimagining the back office and freeing restaurants to spend more time on their culinary offerings and guest experiences. Based in Fairfax, Virginia and founded by restaurant industry veterans, MarginEdge serves a diverse group of operators from single units and small chains to large franchise and hospitality groups, providing a high impact product that resonates across the hospitality industry. For more information visit www.marginedge.com