The pandemic is over, at least for revenue line at the nation’s restaurants.
Food services and drinking places generated $64.9 billion in sales in April, according to retail sales data released by the U.S. Census Bureau on Friday. That was up 3% from March and was more than double what it was in April a year ago—when the industry lost more than half of its sales as states closed dining rooms to prevent the spread of COVID-19.
Perhaps more important, it was up 2% over April 2019, meaning the industry has effectively returned to a more normal state, at least in terms of the revenue it is collecting from customers for food and drinks.
Restaurant sales recover
Source: U.S. Census Bureau
To be sure, there is one more hurdle to go before restaurants can truly say they are recovered. Sales remain about 5% below where they should be had there been no pandemic and the industry continued to grow at roughly the rate of inflation.
Still, it’s a clear sign of the quick and broad recovery at restaurants in the past couple of months. Consumers, armed with stimulus payments and excess unemployment benefits, have been spending at restaurants, eating inside at casual dining restaurants and lining up at the nation’s drive-thrus.
All forms of industry spending appear to be up over 2019 levels. The San Diego-based burger chain Jack in the Box said on Thursday that its same-store sales were up more than 16% over 2019 levels in its last quarter. The casual dining chain Cheesecake Factory has said its April sales were up 7% over 2019 levels.
Third-party delivery continued to generate strong sales, too, as did pizza chains that now believe they can maintain the strong sales they generated last year even as consumers return to dining inside of restaurants.
Independent restaurants have also seen strong sales, at least according to large distributors US Foods and Sysco. “The independent restaurant sector exceeding 2019 sales levels in reopened markets is a positive outcome and a rebound timing that is faster than the industry predicted,” Sysco CEO Kevin Hourican told investors earlier this month.
According to Black Box Intelligence, same-store sales in April were 6.8% higher than they were in 2019—a 460-basis-point improvement from March.
Two-year same-store sales have been positive for seven straight weeks, Black Box said on Wednesday, though it noted that they slowed during the week ended May 2—perhaps suggesting that the impact from stimulus payments is beginning to wane.
Indeed, according to the data research firm Facteus, restaurant sales have slowed from 21% higher than 2019 in the week ended April 18 to 12% higher during the week ended May 9. Fast-food restaurants slowed from 27% to 20%.
Still, the spike in sales has generated intense demand for labor as restaurants struggle to staff up with workers, while also creating supply chain headaches as producers—many with their own labor challenges—have struggled to produce enough things like ketchup packets and chicken wings.