Restaurants and bars gained 286,000 employees in February after losing their jobs a few months, the latest sign that recovery after the long cold winter is imminent.
The icy temperatures, coupled with the revival of new cases of Covid-19, have hurt eateries by the end of 2020 and into the new year.
“So far in 2021, I would say it looks worse than it did in October-November,” said Amob Sharma, senior analyst at Rabobank.
But after severe winter storms, warmer temperatures begin to hit some parts of the country. The distribution of vaccines, which started slowly, has picked up steam quickly over the past month. More than 54 million Americans – about 16% of the total population – received at least one dose as of Thursday morning, according to data from the Centers for Disease Control & Prevention. The approval of the Johnson & Johnson vaccine, which is distributed using Merck, will further accelerate the numbers.
“Looking ahead to our forecast, the speed at which the vaccine will be rolled out is a big part of how we look at the rest of 2021 and even into 2022,” said Technomic senior chief executive David Henkes.
In response to the faster spread of vaccines, states have begun to relax or even prepare to eliminate capacity constraints in restaurants and other venues, although officials from the Centers for Disease Control and Prevention have recommended that the restriction be delayed. Since the beginning of March, at least 35 states have somehow eased restrictions. Connecticut, for example, plans to have restaurants fully operational by the end of March.
But a recent survey in the industry showed clear signs of pain. The National Restaurant Association interviewed 3,000 restaurant operators between February 2 and 10. Respondents were pessimistic about the efforts to restore the industry. About a third said it would take seven to twelve months before business conditions returned to normal in their restaurant, and 29% said it would take at least a year.
Only a few weeks later, the mood feels a little lighter, partly due to the progress with the approval of the latest stimulus package. If accepted, consumers will put $ 1400 in the bank accounts of many consumers, who prefer to spend at least some of the money on dining out while still feeling uncomfortable traveling. Democrats are approving the plan by March 14.
“What we saw when it was issued is that restaurants were a beneficiary,” Henkes said. “There is a growing demand from consumers.”
In addition, the stimulus bill includes a program to give restaurants grants of up to $ 10 million if they lost money last year. These funds can help independent eateries pay bills, hire employees and stay afloat, just in time for the warmer spring temperatures. Fourteen percent of NRA survey respondents said they are likely to close or open doors within the next three months if they do not receive federal assistance.
Even with another stimulus package, Sharma does not expect the restaurant industry to return immediately if everyone has access to the Covid-19 vaccine, based on Australia’s recovery.
“After their business went to single digits in July, August, it took another six months before their total food service sales came closer to pre – pandemic levels,” he said. “Cases – as vaccines pick up – will decline, and there is a pent-up demand and enthusiasm, but it will take a while before consumers return to their pre-pandemic habits.”
Technomic’s latest forecast predicts that the compound annual growth rate of restaurants and bars will shrink by just 3.6% between 2019 and 2021.
Based on calls with restaurant operators, Sharma expects the second quarter of this year to show the highest growth on an annual basis. Not only was the quarter worst hit last year due to the closure, but stimulus control and vaccine distribution should increase sales.
Henkes said he is looking at the Fourth of July as the turning point where the recovery of the restaurant industry will really start to accelerate.
For now, trends still seem skewed. Fast food restaurants have jumped back faster than full service restaurants, thanks to the lower prices and their expertise. Full-service restaurants have also been plagued by restrictions on indoor dining and fewer customers outdoors during the winter. In addition, chains fared better than independent eateries, grabbing market share as moms and pops closed their doors permanently.
By the time most U.S. consumers are ready to resume their pre-pandemic routines, the U.S. restaurant industry may look very different.