Since our issue last month, we’ve seen significant fluctuations in dine-in rates across the country, likely caused by the variation in infection rates throughout different regions of the United States. Here’s how the past month has differed from the earlier months of the COVID-19 pandemic, according to statistics from OpenTable:
Between mid-March and mid-June, there was a three-month period where dine-in rates followed a predictable path. When lockdowns were initially implemented, dine-in services basically halted altogether. Nobody was serving customers outside of delivery and takeout. Beginning in May, we began to see dine-in service return very slowly but very steadily. Each day in May saw more dine-in customers at restaurants than the previous one. On May 1st, dine-in service was down by approximately 98 percent of what it was in the same week a year ago. By the end of May, it had risen by about 15 points to being down 83 percent. The upward trend continued until mid-June, regaining more than 50 percent of regular dine-in capacity on average across the entire country.
That upward trend changed a month ago. In the past month – between June 21st and July 23rd – we have not seen the same smooth upward trend in dine-in services we saw for those first three months. Importantly, we also haven’t seen a clear downward trend in the opposite direction either. Instead, what we’ve seen is a great deal of fluctuation. The rate of dine-in services has essentially ping ponged between being down 50 – 70 percent from the same time last year, occasionally dipping down further or raising higher than that.
The takeaway from these statistics should be that restaurants can’t plan on a single-track path toward reopening. Fluctuation is the name of the game in this phase of our battle against the pandemic, and businesses will need to adapt.
In late June, Yelp released an economic impact report with statistics on closures in the restaurant industry. Here are some important facts from that report:
While restaurants had more permanent closures in March than any other commercial segment, they are no longer as likely to close permanently as retail stores are as of late June. This could be an indicator that restaurants that managed to survive the initial lockdowns have been successful at updating their operations in order to stay in business, even as these uncertain times continue.
Still, restaurants have been hit hard. A staggering statistic reported by Yelp is that 53 percent of restaurants that have been listed as closed since the pandemic hit are indicated to be permanent closures.
One promising statistic to consider in addition to these harrowing ones comes from a report by Restaurant Business, which found that the restaurant industry added 1.5 million new jobs last month. This is due to the re-openings that have occurred since the original temporary closures in March. While the numbers do not even closely resemble their pre-pandemic levels yet, it is encouraging that jobs have been added in the past month, and the trend is at least moving in a better direction now.
Retail
That same Yelp report also measured the economic impact of COVID-19 on the retail sector. Unfortunately, its findings in this area are even grimmer than those for restaurants.
The daily rate of closures for retail stores has only continued to increase since March, without the same fluctuation we’ve seen for restaurants in previous months.
Retail outpaces restaurants as having the greatest number of closures in the past four months with more than 27,000 store closures.
One possible reason retail has suffered so consistently, without the kind of fluctuation we have seen in other industries, is because of the market composition. As the pandemic has raged on, we’ve seen the biggest retailers with the greatest market share continue to perform well, while other, smaller retailers have only fared worse than they did before COVID-19.
CNBC reports that companies including Walmart, Kroger, Home Depot and Lowe’s have announced plans to add thousands to their workforces, while other companies are slashing their workforces.
One explanation for this divide is that larger companies had already developed their digital sales platforms more fully before the pandemic and were therefore able to survive when brick and mortar operations needed to come to a standstill.
This trend builds on this same divide we explored in last month’s industry roundup, which discussed the Washington Post’s reporting on increased sales among the largest retailers in America. What we have seen in the past month shows that this trend isn’t stopping anytime soon.
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