Social Distancing Crushes Retail, Hotels, Dining
Social Distancing Crushes Retail, Hotels, Dining
(Bloomberg) -- Americans are listening to government guidelines to avoid crowds, putting stores, hotels and restaurants into near-total shutdowns.
Retail, dining and hospitality have been particularly hard hit by social distancing measures undertaken to stem the spread of the coronavirus, new data show. All three industries have been hit by broad share routs during March as investors survey the extent of the damage to consumption.
Widespread job cuts and losses are mounting as these three sectors remain largely closed for business. Department stores and clothing boutiques are telling shoppers to go online, restaurants have either closed completely or converted to delivery and takeout, and hotels are trying to survive with empty rooms.
Stores
Few shoppers are going to stores days after America’s malls and shopping streets went dark.
Visits to U.S. stores fell nearly 98% last week compared to the same period the year prior, after American retailers closed their doors en masse, according to location-data provider Prodco Analytics. Foot traffic growth has been negative for eight straight weeks.
Total store closures have surpassed 200,000 as of March 30, according to GlobalData Retail. The mass retail shutdown began in mid-March, when America’s major retailers temporarily shut nearly 50,000 stores across the U.S. in just over a week. Entire networks of U.S. shopping malls are closed as well, though stores that sell essential goods, including big box retailers like Walmart Inc., Target Corp. and Costco Wholesale Corp., remain open for business, along with pharmacies, gas stations and grocery stores.
As a result, more than 600,000 retail workers have been furloughed, according to data compiled by Bloomberg.
Hotels
Almost no one is staying at hotels.
Payment transactions at America hotels plummeted 96% over the past week, compared with the week of February 2, as confirmed coronavirus cases began to spread in the U.S., according to payment processor Shift4. The data looks at more than 21,000 hotels across the country.
Hotels have closed in several states and big cities, including New York and Chicago. On March 17, executives from major hotel chains requested a $250 billion bailout package from the federal government. Marriott International Inc., Hyatt Hotels and Hilton Worldwide Holdings Inc. have since furloughed some employees and issued pay cuts.
The industry has already lost more than $5 billion in room revenue due to the impact of the pandemic, according to the American Hotel and Lodging Association. The trade group said job losses could reach 3.9 million.
Restaurants
Americans aren’t eating out either, largely due to state-mandated closures.
Foot traffic is down 100% year-on-year over the last seven days in restaurants across 42 U.S. States and fell precipitously after nationwide restrictions were put in place requiring Americans to stay at home, according to data from OpenTable. The 54,000 restaurants listed on the reservation site have reported almost no dine-in activity at all for the last week. The data tracks dine-in traffic across online, phone bookings and walk-ins and does not include deliveries or takeout orders.
Restaurants have been hard hit by the measures to contain the coronavirus, with many closing completely or going to delivery or takeout orders only. Chains from Burger King owner Restaurant Brands Inc. to Domino’s Pizza Inc. have tapped credit lines to help liquidity as revenue suddenly evaporates. Parent companies are also increasingly offering assistance to struggling franchisees.
Even before the crisis, the restaurant industry was already facing increasing labor, commodity and rent cost pressures. Last week Moody’s Corp. forecast the restrictions would cause operating profits in the U.S. restaurant industry to drop 10% to 20% this year, reversing a previous forecast of single digit growth
©2020 Bloomberg L.P.