Dine-in restaurants begin to see effect of reopening

Sales still way down from last year, but they’re climbing

Fast-food restaurants — well equipped for drive-thru and takeout service — have fared better than sit-down restaurants as the coronavirus pandemic gripped the United States, but that gap could start to close as 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 ending 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 are also opening their dining rooms again.

“America is hungry to dine out again,” Applebee’s President John Cywinski said. “They’re naturally curious and cautious, but they’re coming out.”

Applebee’s has opened around 200 of its 1,660 dining rooms in the country. Guests are tipping generously and drinking a lot of alcohol, Cywinski said, and they’re respectful of Applebee’s precautions such as 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, according to Brian Vaccaro, an analyst with Raymond James.

Some fast-food restaurants — which already relied more heavily on drive-thru and takeout — have been slow to reopen dining rooms. McDonald’s, which has 14,000 U.S. locations, has only opened around 125 dining rooms so far.

Restaurant Brands International, which owns Burger King, Popeyes and Tim

Hortons, has opened around 1,500 dining rooms, or 15% of its U.S. total. Seats are spaced farther than they used to be, and plastic dividers separate customers from cashiers.

Restaurant Brands CEO Jose Cil says opening dining rooms helps customers feel more confident as they slowly reestablish their routines.

NPD analyst David Portalatin says 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 only allow in a limited number of guests.

Applebee’s says it will keep takeout in place, since demand has tripled since the start of the year and introduced new customers 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,” he said. “It’s a little indulgence now to hop in your car and experience something that hasn’t been available.”