U.S. restaurant revenue is falling as takeout and delivery orders fail to make up for lost dine-in sales.
UBS Evidence Lab found that dine-in restaurant sales plunged 69% in the week ended Nov. 29. In that same week, takeout and delivery sales soared 59%. But total restaurant revenue remained well in the red.
Industry experts predicted that the winter would further aggravate eateries' troubles during the coronavirus pandemic. Cold temperatures mean fewer customers are willing to eat outside, even if the establishment provides heat lamps and blankets.
The winter weather has also ushered in a surge of new Covid-19 cases, making consumers more cautious about eating out and leading governors and mayors to place another round of restrictions on restaurants. New York City has banned indoor dining once again, while Los Angeles has halted all in-person dining.
The pandemic has undoubtedly accelerated the shift to food delivery, with eMarketer predicting that overall third-party digital sales are set to more than double this year to $44.94 billion.
Investors have followed the growth in third-party delivery companies closely. Shares of DoorDash, which made its public debut in early December, are up 55%. Its market value of $50.3 billion tops those of Chipotle Mexican Grill, Taco Bell owner Yum Brands and Domino's Pizza.
Still, delivery and to-go sales will not be enough to save some restaurants if these revenue trends continue. The National Restaurant Association estimates that 110,000 establishments have already closed due to the pandemic. The new Covid relief bill passed by Congress late Monday means that restaurants will be able to apply for Paycheck Protection Program funding, but trade groups are hoping for more targeted relief when President-elect Joe Biden takes office.
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