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Restaurants end a tough year on a down note

Sales declined almost 20% last year and slowed in the last three months of 2020 as a surge in coronavirus infections hammered the industry.
Photograph: Shutterstock

It’s official: 2020 was a bad year.

Total industry sales declined 4.5% in December from November, according to newly released federal data. It was the third straight monthly decline as a renewed surge of coronavirus infections led states to shut down dining rooms and keep people from dining out.

It was a bad end to a brutal 2020. Restaurants had their worst year on record by a long shot last year,  with sales declining 19.5% to $617 billion.

The data will likely put some pressure on Congress and President-elect Joe Biden to approve a stimulus measure that provides some aid to restaurants specifically.

Restaurant sales in a brutal 2020

Source: U.S. Census

The numbers from December were hardly a surprise. Early indications from publicly traded restaurant chains and broad sales indexes pointed to a bad December, albeit one that didn’t come close to reaching the depths of the pandemic back in April.

According to Black Box Intelligence, for instance, same-store sales fell 13.3%, while traffic declined 18.6%.

On Monday, the casual chain Red Robin said its same-store sales slowed from a 13.7% decline in October to 21% in November and a 23% decline in December. The family-dining chain Denny’s saw its sales slip from a decline of 26% in October to a 41% decline in December.

The numbers highlight the immense challenge the pandemic and state shutdowns of dine-in service had on the industry. Few industries were hit nearly as hard.

Only retail clothing stores, whose sales declined 26% in 2020, had a bigger drop during the course of the year.

The pandemic led to the closure of tens of thousands of locations while millions of workers lost their jobs—the industry employed 20% fewer people in December than it did in February, for instance, while well over two-dozen chains declared bankruptcy.

The industry lost more than half of its monthly sales in April, due to the shutdowns. But the combination of stimulus payments and reopenings, along with restaurants’ swift shift to takeout and delivery, led to a quick recovery of much of that.

By September, industry sales were down 14% from year-ago levels. That would represent a post-pandemic peak for the year. Monthly restaurant sales declined each month since as the new surge in infections took hold, according to federal data.

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