Loss of CARES
Act enhanced unemployment benefits could hurt industry in the weeks ahead

Chicago, August 3, 2020 — U.S. major restaurant chain customer transactions were down  -11% in the week ending July 26 versus year ago, reports The NPD Group.  This is a modest improvement from the -12% decline versus year ago in the prior week, and a continuation of the relatively flat pattern seen over the last several weeks,  according to NPD’s CREST®
Performance Alerts
, which provides a rapid weekly view of chain-specific transactions and share trends for 75 quick service, fast casual, midscale, and casual dining chains representing 53% of the commercial restaurant traffic in U.S. 

Customer transactions at major quick service restaurant chains were down  -11%  in the week ending July 26 compared to a year ago and were flat from the prior week, week ending July 19. Full service restaurants improved slightly with customer transactions down  -24% from a year ago, a 3-point improvement from the prior week, reports NPD.  

“As we move into the weeks ahead the possibility exists for setbacks in restaurant customer transactions. Up until July 31, somewhere between 25 and 30 million Americans were receiving Federal Pandemic Unemployment Compensation as part of the federal government’s CARES Act, which has provided $600 a week of enhanced unemployment benefits,” says David Portalatin, NPD
food industry advisor and author of Eating Patterns in America
. “These unemployment benefits translated to between $15-18 billion per week being put into consumers’ bank accounts, and for context, total restaurant industry sales right now are a bit less than $8 billion per week. Although the benefits don’t entirely evaporate on August 1 because of backlogs and late claims, the loss of the $600 a week unemployment benefit could adversely affect the restaurant industry.”