Today’s -4.8% GDP print was dire, but it would have been even worse had it not been for a spike in discretionary spending as Americans found themselves under house arrest for the second half of March. Given the importance of consumer spending on GDP, we looked at trends in the restaurant space amidst Covid-19 related headwinds, courtesy of Clover data compiled by Morgan Stanley. What we found is that for the first time in weeks there was a clear WoW improvement in dining spend, an indication that the worst is over for the restaurant industry.
Here are some observations from the dining trends chart below:
- Small business food and drink saw a slight WoW improvement, with volumes down 21% the week ending April 19th vs a normalized level, compared to the prior week’s down 25%. Broader restaurant trends also improved WoW, with restaurant sales now down 49% YoY the week ending April 19th (vs. -60% YoY the week prior). QSR continues to perform better than restaurants, now down 14% YoY (vs. down 31% YoY the week prior)