restaurant coronavirus timeline

How Coronavirus is Impacting Restaurants

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Disruption from Coronavirus has been especially significant for the restaurant industry. The economic slowdown, public markets in distress, supply chains interrupted, tourism coming to a halt, consumers staying at home (which — for many — translates to a lower disposable income), and huge uncertainty can have long-lived effects for many restaurant businesses. A global economic downturn is impacting businesses across the world, though there is a case to be made for why recessions are ultimately good for the restaurant industry

This reveals the importance of having contingency and crisis plans in place (and, frankly, how common it is for chains to under-invest in the planning process). Ignoring macro risks is riskier than ever. Great corporate planning is about more than financial forecasts — and the more thorough it is, the less a CEO has to keep him or her awake at night.

Restaurant Industry Coronavirus Timeline

It’s amazing how fast this crisis is moving and how transformative and long-lasting the consequences will be globally. Here we present a timeline for the Coronavirus crisis from the viewpoint of the restaurant industry to understand what policies are in place and what the top players are doing. We’ll be updating as developments continue to unfold. 

 

December 31, 2019
Government of Wuhan, China Confirms Novel Coronavirus Outbreak
The Chinese government announces that dozens of cases of pneumonia with an unknown cause have been treated, effectively the start of the Coronavirus ("COVID-19") outbreak.
December 31, 2019
January 28, 2020
Starbucks Closes more than 2,000 Stores in China
Following the spread of the outbreak throughout China, Starbucks announces it will be closing more than half of its 4,300 locations in the country.
January 28, 2020
February 6, 2020
Yum! Brands Down ~50% in China
Same-store sales for Yum China brands (KFC, Pizza Hut, and Taco Bell) are down between 40-50% since the Lunar New Year.
February 6, 2020
February 12, 2020
NYC Chinatown Restaurants Reportedly Down 40% in February
Chinese-American businesses are hit hard based on perceptions of the novel coronavirus which is believed to have originated in Wuhan, China. In New York's Chinatown, restaurant sales are down 40% in February, with some restaurants seeing negative sales growth of up to 80% since the Lunar New Year (at the end of January).
February 12, 2020
March 1, 2020
Restaurant Sales in Seattle Down 10%
The first epicenter of the virus in the U.S., Seattle restaurants take a hit in the last week of February with some restaurants down as much as 40%, and the overall industry seeing a 10% drop. Online grocery and meal kit sales were the only foodservice category showing growth in the market over the same time period.
March 1, 2020
March 5, 2020
AA&A Publishes Initial Insights about Foodservice Employees on the Front Lines
Coronavirus could challenge geopolitical tensions in a way not seen since WWII and — if the forecasts are right — it could be even more deadly (by 2x). Foodservice workers are on the front lines and a vulnerable portion of the population not well equipped for the double whammy of lost wages and sudden, unexpected healthcare costs. There is legitimate potential of a WWIII-level crisis brewing.
March 5, 2020
March 9, 2020
Postmates Announces Contactless Delivery
In efforts to reduce person-to-person contact, delivery company Postmates launches "contactless delivery" using dropoff points and other preferences for customers to receive their goods.
March 9, 2020
March 9, 2020
Darden launches paid-sick leave for hourly workers
The parent company of casual dining brands Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen and others announces that employees can accrue one hour of sick pay for every 30 hours worked. Darden was the first company to announce a relief plan for front-line employees, who are often forced to work even when sick — at the risk of contaminating others — because of limited paid time off benefits.
March 9, 2020
March 11, 2020
Starbucks Offers Catastrophe Pay
In an effort to allow employees to quarantine for 14 days if impacted by the coronavirus, Starbucks offers "catastrophe pay" — a strategy the company has used previously if stores had to close for an extended period.
March 11, 2020
March 12, 2020
Tom Douglas Closes 12 Restaurants, Lays Off Staff
Leading Seattle restaurateur Tom Douglas announces that 12 of his 13 Seattle-based restaurants will close and the company will be laying off a majority of staff. A company representative said sales were down 90% since the outbreak of Coronavirus in the city.
March 12, 2020
March 13, 2020
New York Cuts Capacity by 50%
New York Governor Andrew Cuomo announces that all restaurants and bars across the state must limit capacity by 50%.
March 13, 2020
March 13, 2020
Union Square Hospitality Group Closes Restaurants
The first major restaurant group to announce blanket closings, New York-based Union Square Hospitality Group announces all 19 of its locations will close indefinitely. Employees are told they will be paid through March 18, can use accrued PTO for additional payment, and will be put on "unpaid leave" to be eligible for unemployment benefits.
March 13, 2020
March 13, 2020
Grubhub Waives Select Fees for Independents
Grubhub temporarily suspends collection of up to $100 million in marketing fees from independent restaurants across the U.S. (though these fees will have to be paid to Grubhub after the deferral period).
March 13, 2020
March 13, 2020
OpenTable reports reservations down 36% YOY in the U.S.
While February performance remained steady (largely due to Valentine's Day), new data from OpenTable shows restaurant reservations sliding in the U.S. to the tune of down 36% year-over-year.
March 13, 2020
March 13, 2020
Aaron Allen Interview with CGTV
Showing how quickly the industry is being impacted, Aaron Allen does an interview on the COVID-19 crisis and restaurants with CGTN America — which now feels like ancient history given the restaurant industry response.
March 13, 2020
March 14, 2020
Spain, France Close Restaurants
In tandem with other country-wide initiatives in an effort to contain the spread of Coronavirus, both Spain and France close all restaurants.
March 14, 2020
March 15, 2020
Massachusetts Closes Dine-In Restaurants
Restaurants across Massachusetts a href="https://www.bostonchefs.com/news/2020/03/15/ma-restaurants-to-close-to-on-site-dining/">are restricted to delivery and takeout service only with all on-premise dining suspended in the state through at least April 6.
March 15, 2020
March 15, 2020
Saudi Arabia Closes malls, parks, restaurants, and cafes
In efforts to stem the spread of COVID-19, Saudi Arabia closed all malls, parks, restaurants, and cafes across the country. Supermarkets, pharmacies, and food delivery were exempt from the ban.
March 15, 2020
March 16, 2020
Illinois, Ohio, and California order restaurants to close or restrict capacity
Following CDC recommendations of prohibiting gatherings of 50+ people for 8 weeks, governors in Illinois, Ohio, and California move to restrict restaurant capacities and encourage closing dining rooms and reducing capacity. Eating out, in general, is further discouraged by governments.
March 16, 2020
March 16, 2020
Germany and France Implement Lockdown Restrictions
French President Emanuel Macron announces "we are at war" when ordering a lockdown. Both France and Germany implement unprecedented levels of restrictions to contain spread of the virus.
March 16, 2020
March 16, 2020
New Rules in Boston & D.C.
Washington, D.C. Mayor Muriel Bowser announces a new rule mandating restaurants and bars maintain capacity of less than 250 people. Similarly, Boston Mayor Marty Walsh orders restaurants, bars, and nightclubs reduce capacity by 50%.
March 16, 2020
March 16, 2020
Uber Eats Offers Relief to Restaurants
Saying that they want restaurants to be able to "focus on food, not finances," Uber Eats announces an option for daily payouts to help restaurants with cash flow, and will waive fees for independent restaurants.
March 16, 2020
March 16, 2020
Chick-fil-A Suspends Dine In
Continuing efforts by leading chains to curb the spread of the coronavirus, Chick-fil-A announced it would be closing its dining rooms and switching to a take-out and delivery-only model.
March 16, 2020
March 16, 2020
White House Coronavirus Taskforce Advises Against Gatherings of 10+
The White House directly advises citizens to "avoid eating and drinking in bars, restaurants, and public food courts" during Coronavirus Task Force updates.
March 16, 2020
March 16, 2020
Domino's Launches Contactless Delivery
Domino's announces that customers can now select pre-payment and pre-tipping options to minimize hand-to-hand contact during deliveries, with pizzas being left on a "safe and clean surface" until being picked up by the customer.
March 16, 2020
March 17, 2020
OpenTable Cites Restaurant Traffic Down 48%
On a year-over-year basis — based on walk-ins, on-line, and phone reservations — restaurant traffic is estimated down 48% in the U.S. in the wake of the coronavirus outbreak.
March 17, 2020
March 17, 2020
ThinkFoodGroup Moves to Takeout, "Community Kitchens"
Jose Andres-led ThinkFoodGroup announced it would be closing dining rooms in all D.C. and NYC restaurants, moving to a takeout focus. Restaurants would be repurposed as community kitchens, offering affordable meals to-go.
March 17, 2020
March 17, 2020
Doordash Waives Commissions
In response to the Coronavirus epidemic, DoorDash announces it will waive its commission for new independent restaurants in the U.S. that signup for the platform for 30 days, and that existing DoorDash restaurants will not pay commission fees on pickup orders.
March 17, 2020
March 17, 2020
Trump has Call with Top Restaurant Chain Leaders
CEOs and Presidents of leading national and international chains have a phone call with President Donald Trump to discuss the transition to off-premise operations and the restaurant industry's role in stemming the COVID-19 outbreak.
March 17, 2020
March 17, 2020
McDonald's Corporate Closes Dine-In
Quick service giant McDonald's announces its corporate locations will close dining areas. Restaurants will still be offering delivery and takeout.
March 17, 2020
March 17, 2020
Resy Moves to Takeout Focus
Online restaurant reservation system Resy launches updates allowing restaurants to sell "takeout meals" that enable guests to book a meal to-go.
March 17, 2020
March 17, 2020
Colorado Closes Dine-In Restaurants, casinos, theaters, distilliries, pubs, and gyms
Following an announcement by Governor Jared Polis restaurants in Colorado have migrated to delivery and takeout only to prevent the spread of coronavirus. More densely populated cities, like Denver, ordered restaurants not to seat patrons in restaurants until May 11.
March 17, 2020
March 17, 2020
Florida Restaurants Reduce Capacity by Half
Florida Governor Ron DeSantis ordered thatrestaurants operate at half capacityy to help patrons maintain safe social distancing standards. Bars and nightclubs in the state were also shut down for 30 days.
March 17, 2020
March 17, 2020
Many Large Chains Suspend Dine-In Operations
Dunkin’, Chuck E. Cheese’s, Wendy’s, Chipotle Mexican Grill and Golden Corral and other large brands across the country suspend dine-in service.
March 17, 2020
March 18, 2020
NYC Restaurants Move to Delivery & Takeout Only
New York City Mayor Bill de Blasio announces that restaurants in the city must close dine-in facilities and move to a delivery- and takeout-only model.
March 18, 2020
March 18, 2020
NRA Recovery & Relief Proposal
The National Restaurant Association presents a restaurants recovery and relief proposal to the White House with projections of more than $225b in sales losses and 5–7 million jobs lost.
March 18, 2020
March 18, 2020
USHG Lays Off 2,000 Employees
New York-based Union Square Hospitality Group led by Danny Meyer announces they will be laying off about 80% of its staff, equivalent to 2,000 employees. The company said it will continue to cover medical insurance premiums for employees through mid-April.
March 18, 2020
March 18, 2020
L.A. Small Business Loans
Los Angeles Mayor Eric Garcetti announces $11m in no-interest microloans for small businesses, including restaurants, trying to help them stay afloat.
March 18, 2020
March 18, 2020
Subway Reduces Franchisee Royalties by Half
Expecting at least two months of steep sales declines, Subway — the largest fast food chain measured by number of units — reduces royalties and ad funding by 50% for its franchisees, in addition to offering to support operators with rent abatement, reduction, and deferral.
March 18, 2020
March 19, 2020
Cameron Mitchell Announces Temporary Closures
Cameron Mitchell Restaurants announces it will be closing restaurants temporarily and laying-off 4,500 employees.
March 19, 2020
March 19, 2020
Domino's Announces Need for 10,000 Employees
Domino's announces the need for 10,000 full-time and part-time employees to support increased demand for delivery.
March 19, 2020
March 20, 2020
Logan's Roudhouse, Old Chicago Parent Company Closes 261 Restaurants
Cratworks Holdings, the owner of Logan's Roudhouse and Old Chicago, announces it will be closing 261 locations after a lender withdrew financing which was keeping the restaurants operational. The company was already in Chapter 11 bankruptcy protection, and it is unclear if restaurants will re-open, even after the COVID-19 impacts pass.
March 20, 2020
March 20, 2020
Starbucks Closes Cafes, Open as Drive-Thru Only
Starbucks announced that many cafes across the U.S. and Canada will close, and those open will only offer drive-thru and carry out services. Starbucks President Rossann Williams said in a statement, "Let’s be real. Lattes aren’t ‘essential.'"
March 20, 2020
March 20, 2020
Many QSR Franchisors Announce Relief Efforts
Leading QSR Franchisors including Subway, McDonald’s, Chick-fil-A and Qdoba make efforts to reduce financial impact on franchisees, including deferring franchise fees and rent payments.
March 20, 2020
March 21, 2020
Starbucks Increases Pay by $3/Hour
Starbucks CEO Kevin Johnson announced the company would be giving all employees a $3/hour raise for those who are still able to go to work. The service pay will be in effect from March 21–April 19.
March 21, 2020
March 23, 2020
McDonald's and Nando's Temporarily Closes All Restaurants in UK, Ireland
In efforts to help contain spread of the coronavirus, McDonald's and Nando's both shut down their operations — including for takeout — in the UK and Ireland. McDonald's cited that "busy takeaway and drive thru restaurants" was making it increasingly difficult to maintain safe social distancing practices.
March 23, 2020
March 23, 2020
UAE Restaurants Move to Delivery-Only
In alignment with similar policies in neighboring countries, restaurants in the UAE — and Dubai, specifically — close down all dine-in operations for at least two weeks. Fresh fish, meat, and vegetable markets are also shut down across the Emirates.
March 23, 2020
March 23, 2020
Pizza Hut Announces 30,000 Open Positions
Based on rapidly increased demand, Pizza Hut goes on a hiring blitz of 30,000 positions focused on contactless delivery, carryout, and curbside pickup. The company announced that applicants could be hired, trained and on the road packing pizzas within five hours.
March 23, 2020
March 23, 2020
Instacart Plans to Hire 300,000 Shoppers
Having seen order volume grow more than 150% in the last week alone, and the average basket size increasing 15% over the same period, Instacart announces plans to hire 300,000 additional personal shoppers to support demand. To put that into perspective, that's the equivalent to one-third of the workforce of the U.S.'s largest restaurant chain.
March 23, 2020
March 23, 2020
Papa John's Hiring 20,000 Employees
In addition to other pizza restaurants, Papa John's announces it will be hiring 20,000 employees to help meet demand. Employees can apply via text and have the opportunity to start on the same day.
March 23, 2020
March 24, 2020
Luby's Closes 35 Locations, Cuts HQ Staff
Luby's announces that 35 of its remaining 72 locations in the face of COVID-19 concerns, and reduces head office staff by about 50% to cut costs.
March 24, 2020
March 24, 2020
National Restaurant Show Cancels Annual Show
Originally scheduled for May 16–19 in Chicago, the National Restaurant Association cancels its annual Show following guidance from the CDC and Illinois Governor.
March 24, 2020
March 25, 2020
Punch Bowl Social Closes All Locations, Goes Into Foreclosure
Eatertainment chain Punch Bowl Social suspended operations at all 19 of its locations across the U.S. and subsequently laid off all employees and filed for bankruptcy. Cracker Barrel Old Country Store (NASDAQ: CRBL) entered into a strategic partnership with PBS in July 2019 and opted not to invest further citing "substantial uncertainties" given the COVID-19 pandemic.
March 25, 2020
March 25, 2020
Waffle House Closes 365 Locations
Family dining chain Waffle House announced it will be closing 365 locations across the country. This move is seen as especially telling, as "The Waffle House Index" is often a metric used to gauge how critical a natural disaster has impacted an area. In its announcement, the company posted "#WaffleHouseIndexRed".
March 25, 2020
March 25, 2020
Yum! Announces Closures of 7,000 Global Restaurants
Parent company of Pizza Hut, Taco Bell, KFC, and The Habit Burger Grill — Yum Brands announced the closure of 7,000 locations around the world (the company has 50,000+ stores worldwide). Same-store sales are down 20–25% for the month of March. Yum also borrowed $525m from its revolving credit facility on March 24.
March 25, 2020
March 25, 2020
India on "Total Lockdown"
India, the world's second-largest population with 1.3 billion people, is told to shelter in place in the largest coronavirus lockdown to date.
March 25, 2020
March 25, 2020
McDonald's Streamlines Menu
To help simplify operations, McDonald's announced it would be streamlining its menu during the continued coronavirus outbreak, focusing on offering the most popular items.
March 25, 2020
March 25, 2020
Yum Suspends $2b in Buybacks
In an effort to better support employees and franchisees in the era of coronavirus, Yum Brands announced a suspension of its $2 billion share buyback plan. Stock prices improved 4.6% on the day of the announcement.
March 25, 2020
March 25, 2020
Cheesecake Factory Tells Landlords They Won't Make April 1 Rent
Leading casual dining chain The Cheesecake would not be able to make April 1 rent payments in the face of the unprecedented economic impact from the COVID-19 outbreak. The company has closed 27 of its restaurants in recent weeks and locations that remain open are focused on takeout and delivery only.
March 25, 2020
March 25, 2020
U.S. Senate Passes $2 Trillion Stimulus
To help simplify operations, McDonald's announced it would be streamlining its menu during the continued coronavirus outbreak, focusing on offering the most popular items. The company also stopped its all-day breakfast menu (which was launched in 2015).
March 25, 2020
March 26, 2020
Global Death Toll Surpasses 20,000
The global death toll from coronavirus-related infections surpassed 20,000.
March 26, 2020
March 26, 2020
Jobless Claims in the U.S. Hit Record High
Far surpassing the Great Recession (2009) numbers, jobless claims in the U.S. surge to 3.28 million in the face of the economic shutdown.
March 26, 2020
March 26, 2020
Panera Implements Contactless Delivery, Emergency Sick Pay for Employees
JAB Holding-owned Panera Bread announces it will be using "mindful packaging" along with free, contactless delivery in response to the coronavirus outbreak. The company has also started emergency sick pay (covering the cost of COVID-19 testing and expanded sick leave with pay for those who need to be quarantined).
March 26, 2020
March 26, 2020
Chipotle Increases Hourly Pay 10%
Fast-casual leader Chipotle announced 10% raises as "appreciation pay" for employees who are working during the coronavirus crisis, through April 12. Emergency leave benefits for those affected by the virus were also put in place.
March 26, 2020
March 27, 2020
Cheesecake Factory Furlougs 41,000 Employees
Following announcements that it would not be able to make April rent payments, The Cheesecake Factory furloughed 41,000 employees and CEO, David Overton, announced a 20% salary cut for the year.
March 27, 2020
March 27, 2020
CEO of Bravo and Brio Chains Says 71 Closed Restaurants May Not Re-Open
Bravo Cucina Italiana and Brio Tuscan Grille temporarily closed 71 of their 92 locations across the U.S. earlier in March. CEO Steve Layt, who was poised to launch a turnaround for the brands, said — depending on how much longer COVID-19 lasts, the closed locationsmay not be reopened.
March 27, 2020
March 30, 2020
Yum! CEO Donates Salary to Employees
Yum! Brands CEO David Gibbs announced that he would be foregoing his salary for 2020 and donating the money to bonuses for general managers ($1,000 payments to GMs of company-owned units) and an employee relief fund to help counteract the impacts of the coronavirus.
March 30, 2020
March 30, 2020
Ruth's Chris Closes 23 Restaurants
In an effort to shore up its financial position, Ruth's Chris Steakhouse is closing 23 of its 135 locations across the U.S. The company's executives will also be taking pay cuts in addition to furloughing a "significant number of field and home office team members."
March 30, 2020
March 30, 2020
U.S. Government Extends Social Distancing Guidelines to April 30
Following accelerated growth of cases in the United States with a number of new "hot spot" cities, President Trump announces social distancing guidelines will remain in effect until April 30. This is in contrast to earlier goals of having the country back to a semblance of normalcy by Easter (April 13).
March 30, 2020
March 30, 2020
Expo 2020 Dubai Committee Recommends One-Year Postponement
At the request of many member states, the Expo 2020 Dubai steering committee announced a likely postponement of the World's Fair-style event until 2021. The United Arab Emirates supported the proposal to help overcome the challenges of COVID-19.
March 30, 2020
March 30, 2020
Mexico City Restaurants Closed to Dine-In, Open for Takeout/Delivery
Mexico City declares a sanitary emergency and mandates restaurants to close to the public, except for takeout and delivery. The measure will be in place until at least April 30th.
March 30, 2020
March 31, 2020
German, Spanish, Belgian, Italian and British authorities call citizens to work the fields and avoid agricultural losses
Across Europe, officials called on citizens to support the food supply. Farms in Western Europe often rely on laborers from Eastern Europe during the harvest — now restricted due to travel bans in the face of COVID-19.
March 31, 2020
April 1, 2020
Ohio Restaurant Association Estimates $700m in Lost Sales, 100k Job Loses in March
Ohio's Restaurant Association quantified the impact of the coronavirus on the state's restaurant industry. Initial estimates for just the first three weeks of March saw losses of nearly $700m in sales and more than 100,000 layoffs.
April 1, 2020
April 1, 2020
Preliminary Estimates Show 20% of U.S. Restaurants Could Close Permanently
According to a UBS note published April 1, some 20% of restaurants across the U.S. may not re-open following the coronavirus pandemic. This could mean more than 200,000 restaurants keeping their doors closed and a loss of millions of jobs.
April 1, 2020
April 1, 2020
Red Robin Announces Double Off-Premise Sales
In the face of the coronavirus panic casual dining burger chain Red Robin announced it had doubled off-premise sales above pre-COVID-19 levels. This is helping to offset the impact of closures of nearly all of the company's on-premise sales.
April 1, 2020
April 1, 2020
U.S. Paycheck Protection Program Announces More Detail
Small businesses in the U.S. — companies with 500 or fewer employees — will be able to apply for the newly founded Paycheck Protection Program starting April 3. The program was designed as a lifeline for SMBs to keep people employed throughout the coronavirus crisis, and loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.
April 1, 2020
April 2, 2020
Record-Breaking 6.6 Million Americans File Unemployment Claims
In numbers not seen in American history, 6.6 million Americans filed for their first week of unemployment benefits in the week ended March 28.
April 2, 2020
April 2, 2020
Global Confirmed Cases Passes 1 Million
According to the Johns Hopkins Coronavirus Resource Center, the total number of confirmed COVID-19 cases surpasses 1,000,000 — with the majority in the United States, followed by Italy and Spain. Global deaths have surpassed 50,000.
April 2, 2020
April 2, 2020
Shake Shack Sales Down 70%
Being hit hard by the coronavirus pandemic fast-casual burger chain Shake Shack announced sales were down 70% and the company would be furloughing or laying off 20% of head office staff.
April 2, 2020
April 2, 2020
Starbucks Extends Cafe Closures to May 3
Extending upon an announcement made March 21, Starbucks extends the closure of its in-store cafes through May 3. The company's $3 per hour "Service Pay" raises are also continued on the same timeline.
April 2, 2020
April 2, 2020
Eleven Madison Park Partners with
In a partnership with ReThink, a nonprofit organization that uses excess food from grocery stores and restaurants to make free or low-cost meals for New Yorkers in need Michelin-Starred Eleven Madison Park will serve as a commissary to help provide meals to hospital workers across NYC.
April 2, 2020

GLOBAL IMPACT:

  • Between 3.1b–5.4b people in the world are projected to get the coronavirus (between 40%–70% of the population) within a year, according to a Harvard University epidemiologist
  • With a mortality rate of 3.4% (according to the World Health Organization), between 105m–184m people could die from the virus
  • This death rate is unprecedented since World War II, where some 75m people died — this means that coronavirus could be anywhere from 40%–145% more lethal
  • By comparison, foodborne illness affects 770m globally every year (and half of foodborne illnesses are estimated to be associated with restaurants), though it kills approximately 500k people
  • The average American knows 600 people, which means that — on average — 20 people you know may die
  • Some estimates put global dine-in traffic for full-service restaurants down 89% year-over-year as of March 18th (comparisons are daily)

Coronavirus effect on global restaurant traffic

ECONOMIC IMPACT:

  • 49% of Americans live paycheck-to-paycheck (FNBO) and one-third of the population is a $400 expense away from financial hardship (and having to either borrow or not be able to cover an unexpected cost)
  • The average foodservice worker, making $10/hour, could lose up to $400 of income — assuming they miss 5 days of work with sickness
  • At the start of the 2008 financial crisis (September–November ’08), the S&P500 restaurant stock index lost $26b in market cap; between February 19–28, 2020 (when the worst of the coronavirus fears impacted the market) the loss was $42b
  • Global stock markets lost $6t in less than a week after the effects of coronavirus began to ripple throughout industries

U.S. RESTAURANT IMPACT OF CORONAVIRUS:

  • There are more than 15.3m restaurant industry employees in the U.S. alone, servicing roughly one million foodservice establishments (source: National Restaurant Association)
  • Labor costs represent an average of 30% of standard unit-level revenue for most restaurants; any reduction in revenues has a dramatic impact on the P&L at a unit-level
  • More than 170m Americans visit some type of eatery every day (source: TTRA)
  • Social distancing recommendations which have been issued by both federal and local governments around the world reduce demand drivers for restaurants (including movie theaters, concert venues, etc.) further impact the industry
  • Naturally, many Americans will be planning to stay home and restrict dining out, so we can expect to see plenty of empty restaurants, but delivery drivers are not the salvation — rather, they’re the pollen bees of the virus, as they fly from delivery to delivery, potentially spreading sickness among families contained in their homes
  • Publicly traded restaurants in the U.S. lost $152b in market capitalization in 42 days (from February 10 to March 23); that’s equivalent to: 2.9 times the current total market cap of airlines, or 2.2 times the market cap of hotels, motels, and cruise lines, or 2.5 times the market cap of the clothing industry

US-restaurants-market-cap-lost-to-coronavirus

This crisis represents an opportunity to develop new ways to mitigate risk. Some solutions will come from new food safety and sanitation programs (food handling, preparation, packaging, etc.), but alternative formats and technological developments — even applications from other industries — will be critical to navigating the waters to find a profitable way forward. Restoring some of the core tenets of hospitality, including empathetic listening, can also be a benefit to the industry in the longer term. 
 

ADDITIONAL INSIGHTS ON THE CORONAVIRUS IMPACT ON THE RESTAURANT INDUSTRY

About Aaron Allen & Associates:

Aaron Allen & Associates works with leaders of global foodservice and hospitality companies on strategic issues. Specializations of the firm include multinational expansion, system-wide sales building, brand and portfolio strategy, modernized marketing, industry trends, technology, and advanced analytics.  If you’re a foodservice operator or investor seeking to drive growth, optimize performance, maximize value, or create a modernized portfolio in the face of increasing competitive dynamics and an accelerated pace of change, we can help.

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