Upserve is analyzing restaurant industry data from our over 10,000+ customers every day. We’re synthesizing this restaurant data into a regular update so you can keep your finger on the pulse of our constantly evolving industry in the face of COVID and whatever comes next.
Restaurant Data for September 2020
Labor Day Restaurant Trends
Looking ahead to the Labor Day holiday weekend for restaurants, we’re expecting to see similar upticks to previous holidays in 2020. We’ve noted that for holidays like Mother’s Day and Cinco de Mayo, some Upserve Restaurants saw a 100% increase in week-over-week sales for online orders, so it’s important for owners to be prepared.
Last year, restaurants saw a 30-40% increase in sales for the Sunday before Labor Day, a 10-15% sales bump for the Monday holiday, and then a -20-30% decrease in sales on the Tuesday following Labor Day 2019. Restaurants should expect the same pattern in 2020, which means staffing and stocking up for Sunday, and planning to close or minimize operations on Tuesday. We see these sales bumps mostly benefit bars and casual restaurants who saw a 57% average increase in sales last year over the Labor Day holiday weekend. While we expect to see similar jumps this weekend, it’s important to note that due to COVID, sales are still down overall -40-45% from 2019.
Restaurant Data for August 2020
Hurricane Isaias gave a preview of what restaurants might see when cold weather conditions drive away outdoor diners, bringing sales across the East Coast down an average of 11% as many restaurants lost power and outdoor diners in the downpour. Fast Casual restaurants were more resilient to the incident, seeing a 17% increase in sales from the week prior while all other cohorts were down.
Sales snapped back hard the following week, with eager diners making August 8 the best post-COVID sales day nationwide, with a new high-water mark for YOY total and median sales (-47% from the year prior).
Week-over-week sales drop of states in the path of Hurricane Isaias July 28 – August 4, 2020:
Restaurant Data for July 2020
July was relatively stable across the busiest states. Those that re-opened early (FL, SC) have seen recent dips in sales, and those that reopened slowly have seen sales level out. The ability for states to recoup previous years’ restaurant sales vary, from around -55% lower than sales from previous years at the low end (MA, NY, IL, CA), to -28% at the high end (SC, CO). For context, in late June, SC returned to pre-COVID sales levels, but then returned to -30% in July as COVID cases climbed in the state.
- Restaurant sales remained flat over the last three weeks compared to a significant recovery period in May and June. Sales are slightly down in states where COVID cases are rising, and slightly up in the Northeast.
- At the height of COVID, restaurant sales were -86% below the previous year’s average. This number has been growing monthly, and has now reached -52% from last year’s average sales.
- Online Ordering sales are down 31% in large cities from their peak (May 22) as restaurants begin to re-open.
- Overall restaurant sales have improved in states with recovering COVID stats like Illinois (-60% year over year) and New York (-53%). Sales continue to improve in states with more lax dine-in restrictions like Florida (-45%) and South Carolina (-27%, after peaking at -10% in June).
- Rural restaurants have mostly returned to pre-COVID sales levels. CA sales are steady despite new restrictions, with no declines, and if anything a small average increase in overall restaurant sales. Total sales are up week-over-week across the US, but this is directly proportional to last year, with a slight uptick in online ordering sales after a lull around July
What we’ve learned:
- We continue to see the most sales recovery in restaurants who have pivoted successfully to online ordering, family meals, or pop up boxes and grocery items.
- Many restaurants are recouping sales with outdoor dining, but will need to plan for the winter if indoor dining restrictions and outbreaks persist.
July Restaurant Labor Data
Labor cost is one of the most stable statistics in the restaurant industry. Restaurant owners are extremely good at ensuring their labor costs are the same relative to sales and relative to roles every day. During COVID, we see:
- Most restaurants staffed for sales that never came (see jump in total labor cost in May above). The labor trends above indicate that overall at this time, there is a greater financial risk associated with supporting in-person dining.
- Most restaurants did not reduce front-of-house labor linearly with the increase in back-of-house and managerial hours.