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Restaurants are seeing new restrictions on Covid as cases in the US reach record highs

Restaurants are facing a new wave of restrictions, which is another obstacle in their attempts to stay afloat and recover from the coronavirus pandemic.

New daily cases of Covid-19 in the United States reached a record 88,521 on Thursday, according to a CNBC analysis of data from Johns Hopkins University.

“We’re starting to find ourselves on a steep slope of the epidemic curve, so I think you’ll see cases accelerate,” former Food and Drug Administration Commissioner Dr. Scott Gottlieb told CNBC’s Squawk Box. “There are about 15 states in which the degree of positivity is above 10%, the reproduction number is greater than one in all 50 states at present.”


The degree of positivity indicates the percentage of coronavirus tests that return positive, while the reproductive number is a way to measure the ability of Covid-19 to spread. Both numbers suggest a rapid increase forward.

The increase in cases has led some regions of the country to introduce stricter dietary restrictions. Indoor breakfast is again banned in restaurants in Chicago, starting on Friday. In Denver, the restaurant’s capacity has been reduced from 50% to 25%, and the last call for alcoholic beverages is already 22:00

In Europe, which is facing a second wave of infections, feeding mandates across the country are happening again. France is reintroducing the blockade, which includes temporary formwork plants considered insignificant, such as bars and restaurants. Restaurants and bars in Germany will be closed for one month from November 2, with a partial lock.

As the pandemic spread, restaurants and their unemployed employees were left waiting for a new stimulus package from the federal government. Since then, loans to restaurants through the Wage Protection Program have been exhausted, and the unemployment rate in September of 7.9% means that many consumers do not have the money to eat out.

Chain restaurants are returning faster than independent establishments, but the uncertainty surrounding the wave of Covid-10 cases makes predicting their recovery even more difficult.

Starbucks, for example, said Thursday that 63 percent of American cafes have limited seats. The coffee chain is expected to return to sales growth in the same store by the end of its second fiscal quarter in March, but this forecast suggests that by then, the cafe’s seats and opening hours will be almost full.

Some full-service restaurant companies, such as Texas Roadhouse and Darden Restaurants, have linked the resumption of sales directly to loose food restrictions.

And the cold weather means that many restaurants that have relied on patios will get hit. A Bank of America survey of 1,000 users found that 60 ° Fahrenheit was the limit temperature for most visitors. The Cheesecake Factory’s reliance on outdoor dining prompted the bank to lower its inventories in August.

Adopting the new restrictions will be easier for fast food chains, whose reputation for convenience and low prices has helped the sector recover faster from the wider industry. For example, Yum Brands’ Taco Bell saw that in the third quarter, 30 million more customers ordered their food on driveways compared to the same period a year ago.

“We know that this is a flexible environment and that, as we see in Europe, this is simply not an environment in which we can predict and lead for 2021,” Yum CEO David Gibbs told analysts on Thursday. “We have confidence in our team based on how they have recovered so far and that whatever throws us, we will be able to get back to it.”

And for the rare restaurant that flourished during the pandemic, the new restrictions do not pose a threat. Wingstop saw a jump in sales during the pandemic, although canteens remained closed for more than seven months. Instead, the chicken wing chain relies on its technological investment and popularity among customers who order food delivery.

“Emphasizing the strength of our business model, we achieved positive results throughout the pandemic, with sales growth in the same store for the third quarter of 2020 amounting to 25.4%,” spokeswoman Megan Spragger told CNBC.

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