Coronavirus has very likely sickened the bottom lines of U.S. restaurants this quarter as people stay home due to being infected, working from home or practicing social distancing.
The percentage change in the number of seated diners at U.S. restaurants has progressively worsened — and have declined — since March 1, according to new data from OpenTable (see chart below). For March 13, OpenTable data shows the number of seated diners crashed nearly 35%.
Some of the most pronounced declines have been notched in coronavirus hot spots such as New York City and Seattle.
Not making matters any better for restaurants is that major retailers such as Nike, Urban Outfitters, Under Armour and Abercrombie & Fitch have decided to close all of their U.S. stores to promote public safety. That means less traffic to malls and shopping centers, and by extension the food chains that dominate food courts and parking lots.
“While we acknowledge that the aversion to dining is likely different from the aversion to shop, March 9 appeared to be a tipping point in consumer psyche,” points out Jefferies analyst Janine Sticher.
Financial warnings from restaurant chains have been few and far between thus far.
Starbucks — which has pulled seating from its U.S. locations in a social distancing bid —warned recently of a 15 cents to 18 cents a share to fiscal second quarter earnings as a result of closed stores in China. On Sunday, the company said it would halt in-store customer seating in North America for at least two weeks, limit hours and shutter a few shops in high traffic areas.
But no doubt about it — the restaurant warnings are around the bend. And the haircuts to outlooks could be outright shocking.