Full-service restaurants see the biggest impact; older-guest traffic ‘dropped significantly’
Restaurants in the Seattle market, which was the first to deal with U.S. deaths from the coronavirus pandemic, saw sales drop 10% in the initial week ended March 1, according to statistics released Wednesday by hospitality analytics company Black Box Intelligence.
“This only includes a day or two of heightened public awareness,” according to Black Box Financial Intelligence. “Real impact is expected to be over 20% in lost restaurant sales after one full week.”
“There are two things in play here,” said Victor Fernandez, Black Box Intelligence’s vice president for insights, in an interview. “One is the more localized effect, which we saw in Seattle and expect to start seeing in markets like California and San Francisco. … The other thing that complicates things is the effect throughout the country, but it’s hard to tell at this point.”
Dallas-based Black Box Intelligence has created a website with updated COVID-19 data.
“Full-service restaurants in Washington [State] are seeing the most negative effect in terms of lost sales, especially those that are more upscale,” Black Box noted, adding that there is a shift toward limited-service restaurants initially. Black Box defines “upscale” restaurants as those with per person check averages of $25 or more.
In Seattle's Pike Place Market, foot traffic has slowed, according to a report from KOMO News, with restaurant sales at some locations dropping about 30% from this time last year, according to Heong Park, owner of the Bacco Café and Chan restaurants in the market.
Park said he was optimistic guests will start emerging from their homes after getting over the initial shock of the virus spreading in their community. Park’s third Seattle restaurant, Meet Korean BBQ, in the nearby Capitol Hill neighborhood, was still seeing guests come for later dinners, he said.
Visit Seattle, the tourism group, said Wednesday that “many restaurants” were experiencing sales declines of as much as 40%.
Black Box also noted Seattle saw an increase in to-go restaurant sales in the wake of the first reports.
“Average to-go sales by restaurant location increased by 10.5% in Seattle during the week ending March 1,” Black Box noted.
“These shifts seem to indicate that as concerns for the virus continue to rise, guests will likely favor quicker or off-premise dining experiences versus extended sit-down restaurant meals interacting with servers and sitting among other guests,” Black Box said. Those to-go transactions are probably replacing dine-in sales, Fernandez noted.
Unlike sales declines during the Great Recession of 2008, Fernandez said the Seattle coronavirus declines seem more targeted to restaurants. “I would think the expectation would be for restaurant companies to get ahead of it and reassure guests that measures are in place to prevent to minimize risk,” he said.
Black Box also noted demographic sales differences.
“In Seattle restaurant spending from older guests (65 years) dropped very significantly compared with their spending in the rest of the country during the week,” the report said. “This is the age group whose consumption is likely to be the most affected going forward as well.”
The coronavirus, or COVID-19, has more severe health impacts for older citizens, according to health experts. Most of the deaths in Seattle were at a senior citizen nursing facility.
One foodservice category where Black Box data showed year-over-year growth in the wake of the coronavirus crisis was online grocery and meal kit sales.
“This could signal an upcoming trend as consumers shift more of their share-of-stomach spending towards options that allow them to avoid contact with other people while giving them more control over food preparation and hygiene,” the company’s Consumer Intelligence division noted.
Black Box also measures online sentiment, and the company said it was “beginning to show heightened attention by guests to coronavirus related to food safety and cleanliness, as well as paying attention to signs of sickness among staff members.”
Fernandez said, “It’s still early but we are seeing, from guests, a lot of concern around cleanliness or sickness among the staff.”
Black Box will continue to refresh information and data, Fernandez said.
Contact Ron Ruggless at [email protected]
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