The total shortfall in restaurant and foodservice sales likely surpassed $120 billion during the first three months of the pandemic.
As local economies begin to reopen and ease dining restrictions, many consumers are standing by to burn off the pent-up demand that they accumulated during the lockdowns. However, despite the sales uptick in May, the restaurant industry’s business environment is far from normal, and overall losses continue to mount.
Eating and drinking places* registered sales of $38.6 billion on a seasonally-adjusted basis in May, according to preliminary data from the U.S. Census Bureau. While that was up nearly $9 billion from April, it remained nearly $27 billion down from the pre-coronavirus sales levels posted in January and February.
April’s eating and drinking place sales volume of $29.9 billion was revised down from the Census Bureau’s preliminary estimate of $32.4 billion. In inflation-adjusted terms, that represented the lowest sales at eating and drinking places since February 1983.
While the seasonally-adjusted figures offer a month-to-month look at spending trends, they don’t provide a complete picture of the sales losses that have been experienced by restaurants during the coronavirus pandemic. For this, the Census Bureau’s unadjusted data set is a better measure, because it represents the actual dollars coming in the door.
In recent years, May was typically the top sales month for restaurants, based on the unadjusted data. On average during the last 5 years, May sales at eating and drinking places were more than 5 percent higher than the average monthly sales volume for the entire year. This year, May sales were more than 40 percent lower than what would have been expected in the absence of the pandemic.
In total between March and May, eating and drinking place sales levels were down more than $94 billion from expected levels. Add in the sharp reduction in spending at non-restaurant foodservice operations in the lodging, arts/entertainment/recreation, education, healthcare and retail sectors, and the total shortfall in restaurant and foodservice sales likely surpassed $120 billion during the last three months.
*Eating and drinking places are the primary component of the U.S. restaurant and foodservice industry, which prior the coronavirus outbreak generated approximately 75 percent of total restaurant and foodservice sales.
Read more analysis and commentary from the Association’s chief economist Bruce Grindy.