Restaurant revenues declined, despite the delivery explosion

Revenues in US restaurants are declining because delivery and delivery orders fail to offset mass sales losses.

UBS Evidence Lab found that restaurant sales fell 69% in the week ending Nov. 29. In the same week, sales of supplies and deliveries increased by 59%. But total restaurant revenues remained good on the red.

Industry experts have predicted that the winter will further aggravate restaurant problems during the coronavirus pandemic. Cold temperatures mean fewer customers are willing to eat outside, even if the unit offers heat lamps and blankets.

Winter weather has also introduced an increase in new Covid-19 cases, making consumers more cautious about outdoor consumption and leading governors and mayors to apply another round of restaurant restrictions. New York City once again banned indoor dining, while Los Angeles shut down all meals in person.

The pandemic has undoubtedly accelerated the shift to food delivery, with eMarketer predicting that third-party digital sales will more than double this year to $ 44.94 billion.

Investors have been closely following the growth of third-party delivery companies. Shares of DoorDash, which debuted publicly in early December, rose 55%. Its market value, of 50.3 billion dollars, is higher than that of the Chipotle Mexican Grill, owned by Taco Bell, Yum Brands and Domino’s Pizza.

However, the deliveries and sales available will not be enough to save some restaurants if these revenue trends continue. The National Restaurant Association estimates that 110,000 units have already closed due to the pandemic. The new Covid bailout bill passed by Congress late Monday means restaurants will be able to apply for funding for the Wage Protection Program, but trade groups hope to have more precise relief when President-elect Joe Biden takes office.