12.07.20 - Covid-19 has been brutal for big tenants of American shopping centers, such as clothing stores and cinemas. Not so for the casual eateries that surround these outlets. Many of America’s sit-down dining chains are on track to emerge stronger after two-quarters of pandemic-driven innovation. The final hurdle is the winter.
Independent restaurants have been one of the biggest victims of the lockdowns. As early as March of this year, many state and local regulations shut down dining halls and began to slim down the amount of sit-down space for restaurants. Yelp, a popular review website for restaurants, reported more than 32,000 restaurants had closed between March and September of this year - 61% of these are predicted to be permanent.
Larger chains have done much better, however. With the necessary credit lines and corporate infrastructure to roll out new delivery methods and safety measures, they slowly found ways around these roadblocks. Many have now already recovered or exceeded their pre-pandemic valuations.
America’s restaurant chains are strongly outperforming international rivals, and American consumers have steadily returned to fill seats as officials lifted restrictions throughout the country. In some other markets, however, more stringent regulations and cautious consumers are holding back a potential recovery. Hong Kong’s restaurant industry has yet to turn around from its spring collapse; receipts fell to an all-time low in the third quarter and even fast-food purchases fell by 23% relative to last year. The share price of Vapiano, a big German chain, stands at less than a tenth of its pre-pandemic level.