How can you tell the pandemic is nearly over? Americans are spending more than ever at restaurants.
Sales at bars and restaurants surged in May for the third month in a row to push total receipts to an all-time high of $67.3 billion, new government figures show.
Sales had peaked at $66.3 billion in January 2020, just a few months before the coronavirus slammed the U.S. Receipts then briefly slumped by 55% to under $30 billion when most of the country was locked down.
Read: Retail sales fall in May as stimulus fades, but the U.S. economy is still primed for fast growth
The industry’s recovery from a near-death experience is set to accelerate, too. Restaurant reservations exceeded precrisis levels for the first time in May, research from OpenTable shows.
And that’s likely to become the norm during the summer. Americans saved a lot of money during the pandemic and they’re flush with cash from federal stimulus payments. Surveys show more consumers plan to dine out in the months ahead as life returns to normal.
“Sales at restaurants and bars continued to benefit from the warmer weather and looser business restrictions,” said lead U.S. economist Lydia Boussour of Oxford Economics.
One caveat: Some of the increase in sales reflect higher prices on restaurant menus. If adjusted for inflation, restaurant sales are still about 3% lower compared to the pre-pandemic peak.
Read: Inflation is surging. How high will it go? Check out MarketWatch’s new tracker.
It’s not all good news, though. The pandemic left a lot of wounds and they are going to take time to heal.
The industry’s top trade group, the National Restaurant Association, estimates 110,000 of the nation’s nearly 1 million restaurants closed temporarily or permanently during the pandemic.
A large portion of them were small, independent eateries. Larger chains and those that already relied heavily on takeout orders fared a lot better, industry analysts say.
OpenTable, for its part, said its research suggests as many as one in four restaurants shuttered over the past year.
The devastation forced virtually every restaurant to slash payrolls, leaving many former restaurant workers on unemployment benefits or prodding them to find other jobs.
Now getting all those employees back could become another major headache. Even with sales surging, restaurants employ 1.48 million fewer people now than they did before the viral outbreak, government labor statistics show.
Many restaurant owners say they can’t find enough people to cook food or wait on customers. Some are increasing pay to try to lure them back, but others have had to scale back service for want of enough workers.
If there’s a silver lining, the crisis forced restaurants to learn how to get by with thinner staffs by adopting new practices or technologies to produce and deliver food.
As of May, restaurants employed 10.8 million people, down from 12.3 million before the pandemic. It could take awhile before employment reaches that level again.
