Delta Variant Puts Restaurant Rebound at Risk

Consumers Opt to Dine In

The restaurant industry’s pandemic recovery is at risk as the Delta variant spreads through the country, prompting more consumers to stay home. That could hurt Ruth’s Hospitality (RUTH), Bloomin’ Brands (BLMN), Denny’s (DENN), Texas Roadhouse (TXRH), Cheesecake Factory (CAKE), and other restaurant operators which had been gearing up for more dine-in business.

Restaurant executives are still optimistic they can maintain sales growth, but the industry may be headed for a bumpy ride. Restaurant visits in Los Angeles declined 17% for the week ending August 1. The number of consumers eating out was rising prior to the city reinstituting mask mandates. Sales in restaurants have been declining nationally since the end of July.

Restaurant Operators Mull New Pandemic Measures

Restaurants had to overhaul their business operations overnight as the pandemic resulted in shutdowns and social-distancing requirements. Now, restaurants are assessing rules regarding vaccinations as cities institute new policies.

Beginning in September, people dining in restaurants in New York City will need to show proof of vaccination, while Los Angeles is considering similar requirements in indoor public spaces. Some restaurant operators are also mulling whether they should bring back plexiglass shields, thermometers, mask mandates for employees, and other social-distancing measures.

Still Reason for Optimism

Despite the rise in COVID-19 cases, vaccination rules, and consumers’ reluctance to eat out again, some industry executives think they can keep sales up even if the pandemic worsens. They point to a stronger-than-anticipated recovery so far and their ability to weather the previous outbreaks.

Same-store sales in June at Denny’s, Cheesecake Factory, and Texas Roadhouse were up significantly compared to 2019 levels. Still, restaurant owners acknowledge that recovery will not be a straight shot. Until the pandemic is contained, the restaurant industry will likely experience fits and starts of recovery.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender