January 15, 2021

Restaurant sales fell to their lowest level since June

Business conditions in the restaurant industry deteriorated rapidly as 2020 came to a close, according to an analysis of data from the U.S. Census Bureau. After reaching a pandemic-era peak of $55.7 billion in September, eating and drinking place* sales trended sharply lower during the final three months of the year.

Moreover, sales losses accelerated each month during the fourth quarter. After edging down 0.3% in October, eating and drinking place sales plunged 3.6% in November and 4.5% in December. This confirms that the restaurant industry slipped into a double-dip recession – well before it even came close to recovering from the original downturn last spring.

As a result, the restaurant industry’s road to recovery has grown even longer. As of December, eating and drinking place sales stood more than $14 billion – or 22% – below their pre-coronavirus levels in January and February. In September, this shortfall was less than $10 billion. 

Overall, total restaurant and foodservice sales were down $240 billion from expected levels in 2020, according to Association estimates. This includes the sales shortfall at eating and drinking places, plus a sharp reduction in spending at foodservice operations in sectors such as lodging, arts/entertainment/recreation, education, healthcare and retail.

*Eating and drinking places are the primary component of the U.S. restaurant and foodservice industry, which prior to the coronavirus outbreak generated approximately 75 percent of total restaurant and foodservice sales.

Read more analysis and commentary from the Association's chief economist Bruce Grindy.