Gift Cards May Be an Early Present for Restaurants in 2020

(Bloomberg) -- Restaurants may receive a belated holiday present in the first quarter, which is generally the sector’s slowest time of year.

A survey from the National Restaurant Association showed about 47% of adults in the U.S. planned to give a restaurant gift card during the holidays. That’s good news for the industry, which may face difficult year with labor and commodity costs poised to climb further.

“If the recent gift card story is a prediction for potential pent-up demand in the first quarter, this could represent a positive start for restaurant sales,” MKM Partners analyst Brett Levy said.

The National Restaurant Association survey also showed that about 72% of people want a restaurant gift card this holiday season. And, the research revealed that about 20% of the diners plan to use the gift as soon as possible.

MKM’s Levy also said breakfast offerings, value meals, new menu items, delivery and digital will impact restaurants performance in 2020. Meanwhile, he said the ICR investor conference in mid-January may provide investors with a better view. He expects Denny’s Corp. will give a financial update at the event.

©2019 Bloomberg L.P.

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