Fast-food restaurants -- well-equipped for drive-thru and takeout service -- have fared better than sit-down restaurants as the coronavirus pandemic gripped the U.S., but that gap is starting to close as some dining rooms reopen.
U.S. customer transactions at full-service restaurant chains such as Olive Garden and Applebee's plummeted 79% year-over-year at the beginning of April as lockdowns closed dining rooms across the country, according to NPD Group. Fast-food sales were down as well, but by 41%.
A month later, those numbers are improving. For the week that ended May 10, full-service restaurant transactions were down 58%, while fast food sales were down 21%. States with the most dining rooms open, like Texas and Tennessee, had some of the highest sales.
Major chains represent 76% of U.S. restaurant industry traffic, NPD said. Independent restaurants saw steeper sales declines than chains as lockdowns began, and data on their recovery lags the data available for chains. But many independent restaurants also are opening their dining rooms again.
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"America is hungry to dine out again. They're naturally curious and cautious, but they're coming out," Applebee's President John Cywinski said.
Applebee's has opened about 200 of its 1,660 dining rooms in the U.S. Guests are tipping generously and drinking a lot of alcohol, Cywinski said. They're also respectful of Applebee's precautions, like the use of disposable silverware and menus.
As of this week, 32 states -- mostly in the Midwest and South -- have allowed dining rooms to open at least partially, said Brian Vaccaro, an analyst with Raymond James.
That's helping sit-down restaurants. Olive Garden had 179 dining rooms open the week of May 3. By the week of May 17, that had jumped to 398, or 49% of the chain's total. Sales per restaurant increased 13% during that time.
Some fast-food restaurants -- which already relied more heavily on drive-thru and takeout service -- have been slow to reopen dining rooms. McDonald's, which has 14,000 U.S. locations, has opened about 125 dining rooms so far. The company distributed a 59-page rule book that franchisees must follow as they reopen dining rooms. Play spaces must be closed, for example, and masks must be available for customers if they request them.
Restaurant Brands International, which owns Burger King, Popeyes and Tim Hortons, has opened about 1,500 dining rooms, or 15% of its U.S. total. Seats are spaced farther apart, and plastic dividers separate customers from cashiers.
Restaurant Brands chief executive Jose Cil said opening dining rooms helps customers feel more confident as they slowly reestablish their routines.
"It gives them comfort that they can step out of their home and enjoy it at one of our restaurants," Cil said this week as he sat in a Burger King dining room in Miami. Masked employees frequently sanitized tables.
NPD analyst David Portalatin said full-service restaurants have more issues than fast-food restaurants when it comes to reopening dining rooms. It costs more to hire back waitstaff, and they may decide it's not worth reopening if they can allow in only a small number of guests. Some also may need to reconfigure parking lots that are now set up for curbside service.
Applebee's says it will keep takeout in place since demand has tripled since the start of the year and new customers have been introduced to the brand.
But Cywinski said dining rooms will also continue to reopen. The chain hopes 80% of its dining rooms will be open by the end of June.
"There's so much pent-up demand. It's a little indulgence now to hop in your car and experience something that hasn't been available," he said.
Information for this article was contributed by Cody Jackson of The Associated Press.
Business on 05/22/2020