President Biden signed the American Rescue Plan in March of last year and Americans began receiving checks shortly thereafter, including $1,400 checks for individuals who met certain income requirements. The plan also included other payments, such as extra unemployment benefits and child tax credits.
Nothing generates restaurant sales quite like consumers getting money directly into their hands. The result was a sales spike in the spring that could be difficult for many restaurants to match this year, especially if they are full-service.
For starters, look at the month-to-month increase in restaurant and bar sales, according to federal data:
Food services and drinking places sales, monthly change
Source: U.S. Census Bureau
There were other things happening in March, namely the arrival of vaccines and a consumer that apparently decided to eat out at restaurants more often. Restaurant sales increased dramatically in the spring before plateauing and finally stumbling a bit toward the end of the year.
The impact was most pronounced at full-service restaurants. Look at two-year stacked same-store sales at publicly traded full-service chains:
Full-service two-year stacked same-store sales
Source: SEC, Restaurant Business
We see some obvious struggles and then a dramatic recovery that spiked in the second calendar quarter of 2021—which happened to be the quarter where much of the post-stimulus spike took place.
There was also a spike for limited-service restaurants, though it was less pronounced.
Limited-service two-year stacked same-store sales
Source: SEC, Restaurant Business
That second-quarter increase was less pronounced because fast-food chains in particular recovered more quickly thanks to their reliance on drive-thru and delivery service. Pizza chains and Wingstop thrived during the pandemic. Even then, we saw a pickup in sales in the second quarter and a rather moderate slowdown.
To be sure, prices have been increasing for much of the year. But prices accelerated in the back half of 2021 and likely played a bigger role in the industry’s continued growth throughout the year. And vaccinations and a sense that things were getting better definitely played a role.
But there is no question that stimulus payments found their way to restaurants last year, which historically happens any time the government sends people money. Yet that also means that restaurants could see some same-store sales pressure this spring as they run into difficult comparisons—especially given consumers’ worries about inflation. While people could certainly return to restaurants this spring after cutting back in December and January because of omicron, they won't have those government stimulus payments to help fund those visits.