Restaurant sales

Dine out: August U.S. restaurant sales rise as industry struggles continue

The recovery in US restaurant sales and employment continued in August, but at a slower pace than in previous months.

August sales from the beleaguered industry fell about 15% from the year-ago period, leaving the US restaurant industry on course to lose $240 billion in sales by the end of the year, according to the National Restaurant Association. Year-over-year sales decline in August was yet another monthly improvement after sector sales fell 19.4% year-over-year in July and 22.1 % in June.

Shares of most of the largest publicly traded restaurant companies rose in the month ended Sept. 15.


Food services and drinking places sales fell 15.4% in August from a year earlier to a seasonally adjusted $54.64 billion, according to the U.S. Census Bureau’s monthly advance estimates released September 16.

All retail sales rose 2.6% year-over-year in August to $537.53 billion, down from the 4.2% growth recorded in August 2019.

Sales of food and beverage services in August increased from the July figure.

Some industry sectors are doing better than others. Sales at limited-service restaurants rose 6.8% year-over-year in July, while sales at full-service restaurants fell 37.5% year-over-year in July, Truist Securities analyst Jake Bartlett said in a Sept. 16 report.

“After the initial rebound in sales following government-mandated closures during the early weeks of the coronavirus outbreak, consumer spending at restaurants slowed during the peak summer months,” the company said. National Restaurant Association in a September 16 report.

In the coming months and likely into 2021, the U.S. restaurant industry’s recovery will continue to look more like a slow climb instead of the rebound to pre-COVID sales levels that many are hoping for, according to a report from Black Box Intelligence from September 9. The number of diners seated in the United States fell 51% on September 15 on a yearly basis, restaurant reservation platform OpenTable reported.

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Sysco Corp., a restaurant supplier, recently reiterated that the main indicator of the pace of recovery is the easing of restrictions, with restaurants seeing an almost immediate increase in activity when restrictions are lifted, the analyst said. of Credit Suisse Lauren Silberman in a September 19 article. 11 report. Earlier in September, New York Governor Andrew Cuomo announced that indoor dining in New York could resume on September 30 with a 25% occupancy limit, mandatory temperature checks for customers and no service. bar.

According to a study by the United States Centers for Disease Control and Prevention published on September 11, going to places that offer eating and drinking on the premises was associated with being positive for COVID-19. The National Restaurant Association called the study flawed.


Food services and drinking places added 133,600 jobs in August, down sharply from July, when the industry added 525,300 jobs. Jobs in food services and drinking places totaled 9.8 million in August, down 18.7% from a year ago.

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Restaurant job gains in July and August were only enough to put a “modest blow” in the job losses the industry has suffered due to the pandemic, the National Restaurant Association said. in a September 4 report. The slowdown in hiring comes after the industry saw an unprecedented increase in hiring in May and June as states reopened their economies.

“Due to the recent downturn, employment in food and beverage outlets remains nearly 2.5 million jobs below its pre-coronavirus peak,” the trade group said.

The outlook for future hiring is mixed as restaurateurs face uneven customer traffic, a tough economy and the end of the outdoor dining season in some parts of the country. Potential increases in COVID-19 case levels could also renew dining restrictions, the National Restaurant Association said.

“Current trends suggest that if business conditions do not improve, the restaurant industry’s employment recovery is likely to come to a halt,” the trade group said.

Share the prices

According to S&P Global Market Intelligence, eleven of the 15 largest publicly traded U.S. restaurants posted stock market gains in the month ended Sept. 15. More broadly, the S&P Composite 1500 Restaurants sub-index rose 7.7% and the S&P Composite 1500 index edged up 0.5%.

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Shares of Shake Shack Inc. rose 32.4% in the month ended Sept. 15, the biggest gain and swing of the period. Shares of Wingstop Inc. fell 16.5% in the month ended September 15.


Default risks for listed restaurants appear to have eased somewhat in recent months.

A Sept. 15 analysis of one-year probability of default ratings identified 15 U.S. public restaurants with ratings ranging from 22.4% to 8.4% and corresponding implied credit ratings of “ccc” to “b-.” , according to data from Market Intelligence. By comparison, a similar analysis performed on July 16 showed a range of 41.2% to 5.7%.

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Potbelly Corp. had a 22.4% chance of defaulting over the next 12 months. Brinker International Inc. had a 16.4% chance of defaulting next year. Noodles & Co. had a 16.2% chance of defaulting. Those companies did not respond to requests for comment.