Restaurants Get Sales Lift from Latest Stimulus Checks
By Heather Haddon
Restaurants chains say they are getting a sales bump from the
latest round of stimulus money going to households, but spending
patterns from the first batch of checks earlier in the pandemic
suggest the lift can fade quickly.
The roughly $900 billion coronavirus aid package signed into law
last month provided a second round of stimulus payments----$600 per
adult and $600 a child. While the amounts are lower than the $1,200
and $500 delivered last spring, they are having an impact, at least
short-term, according to some restaurant executives and industry
Church's Chicken, Checkers Drive-In Restaurants Inc., Noodles
& Co. and TGI Fridays are among the companies crediting higher
sales to the stimulus, according to executives. Some McDonald's
Corp. restaurant owners also attributed strong January sales to the
recent checks, as did fine-dining chain Fogo de Chão.
Chris Elliott, the Tampa, Fla.-based owner of restaurant chains
that include Beef 'O' Brady's and the Brass Tap, said the second
round of checks contributed to a 6.5% increase in sales this month
compared with last.
"People relax a little, and they want some normalcy in their
lives," Mr. Elliott said about the stimulus, adding that it
coincided with a number of big football games in the area, leading
some patrons to order in food.
It is unclear how long the lift will last from the stimulus
money, however, as struggling restaurants navigate fluctuating
rules governing indoor dining and other coronavirus-related
restrictions. Tens of thousands of restaurants have closed, and
more are expected to do so this winter. Estimated restaurant sales
fell 19.5% last year compared with 2019, trailing only clothing
retailers, according to data from the Commerce Department.
The recovery from the pandemic remains uneven. Unemployment has
fallen from earlier in the pandemic, but remains elevated compared
with last year. Consumer spending has grown from the depths of the
pandemic, but Americans are paying for more goods than
The first round of stimulus checks that went out in April helped
boost sales for major restaurant chains by 3% to 12%, according to
industry research firm Revenue Management Solutions, which said
some restaurant companies are also getting a bump after the most
recent checks went out.
However, weekly sales from several casual-dining chains showed
the initial sales improvement faded quickly after the first checks
in April, according to company figures.
Some restaurant chains said the latest stimulus comes at an
opportune moment, as they have started to introduce new products
and promotions after putting many on pause during the early months
of crisis. A number of fast-food chains have released new fried
chicken sandwiches, for example.
Katelyn Alves, a 29-year-old operations administrator for a
credit union who lives in northern California, said she spent some
of her stimulus money on delivery of a steak bowl, chips and a soda
from Chipotle Mexican Grill Inc.
"I have been saving my money during the pandemic but this time,
I thought it might be good to treat myself," Ms. Alves said.
Frances Allen, chief executive of the 840-unit Checkers and
Rally's drive-through brands based in Tampa, Fla., said checks
during the pandemic have provided the bump that the chain typically
sees when federal tax rebates go out.
"A stimulus check arriving in the hands of customers gives every
[fast-food] chain and many others a boost," Ms. Allen said in an
The restaurant sector has continued to lobby for federal funds
to benefit operators and their customers. President-elect Joe Biden
last week called for a further $1.9 trillion stimulus plan, saying
Americans need more funds to help the U.S. economy recover from the
Kimberly Dines, a 42-year-old Monroe., Mich., resident who is
unemployed, said she and her husband treated themselves to a
McDonald's dollar meal with stimulus money in the spring but don't
feel they can now.
"I don't see the ability arising for us to be able to eat out,"
she said. "Our struggles have been so overwhelming."
(END) Dow Jones Newswires
January 20, 2021 11:19 ET (16:19 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.