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Americans are dining out at restaurants in states that have reopened, but in the absence of a vaccine, eateries shouldn’t expect much more demand than current levels, recent data suggest.
“Without the ability to control the risk posed by the virus more effectively, consumers may simply be unwilling to fully resume ‘normal’ behavior,” according to Height Capital Markets, an investment banking research firm based in Washington, D.C.
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At the same time, consumers are shopping at supermarkets and Walmart more frequently now than they did at the same time last year. But less so than they did at the peak of the virus, analysts with Height Capital Markets wrote in a recent note.
That suggests that retailers like Walmart WMT, -1.11% should expect to see shopping levels return to pre-coronavirus levels in the near future, per Height Capital Markets’ assessment of foot traffic data compiled by SafeGraph.
Meanwhile, eating in sit-down restaurants, visits to Starbucks SBUX, +1.08% and hotel stays appear to be increasing, and have started to move back to “normal” levels in recent weeks, but they still have a long way to go, Height Capital Markets found.
Foot traffic at sit-down restaurants is about 42% of a comparable “normal” level, while visits to Starbucks are about 57% of the way back to normal levels. Hotel stays are about 35% of the way there.
Analysts in the note stated that the current levels of demand in these discretionary spending categories may have plateaued, meaning they are unlikely to rise much further until there is a way to prevent people from contracting coronavirus, which has taken the lives of nearly 100,000 Americans.
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“We will only ever see a certain amount of activity return, and as more and more options are available, that may serve to dilute demand for each individual option,” the note said.
Places like bars, movie theaters and shopping malls are “likely to recover back to ‘normal’ last,” the note states. “In our view once these numbers are increasing significantly, even if they are not fully back to normal, it is safe to say that consumers view the virus as under control.”
