Are coronavirus fears hurting sales at local Chinese food restaurants?
March 12, 2020
There’s no doubt that businesses of all sizes are feeling anxiety about the potential impact on business as coronavirus continues to spread. Local restaurants, in particular, have already reported seeing an impact on revenue. But, according to analysis by the Womply Research team, Chinese Food restaurants began to suffer a drop in sales long before other types of restaurants.
We analyzed credit card transaction data at nearly 2,000 local Chinese food restaurants across the country to find out whether coronavirus fears have been keeping customers away from Chinese food restaurants more than other types of restaurants.
Chinese food restaurant sales have been down nationwide since the first confirmed case of coronavirus in the United States
To find out whether coronavirus fears have impacted revenue at Chinese food restaurants in the U.S., we analyzed credit card transaction data for the first 9 weeks of the year in 2020 and compared them to the first 9 weeks in 2019.
Here’s what we found when comparing average weekly revenue at Chinese food restaurants in early 2019 vs. early 2020:
As you can see, the average Chinese food restaurant started 2020 on a high note, pulling in more weekly revenue than at the start of 2019. Things changed rapidly, however, as the first case of COVID-19 was confirmed in the United States.
During a stretch where Chinese food restaurants last year saw weekly revenue begin to climb, revenue dropped precipitously in 2020. Things have rebounded slightly from a low point on week 5, but still lag behind 2019’s averages.
Here’s the trend in another chart showing the direct week vs week comparison between 2019 and 2020:
Again, here you can see that 2020 was shaping up to be a great year for Chinese food restaurants, with weekly revenue trending well ahead of 2019. Since coronavirus began to dominate the headlines, though, weekly revenue has been down for Chinese food restaurants across the country.
Other restaurants have yet to feel the same impact as Chinese food restaurants
If you’re wondering whether it’s a general fear of eating out that’s driving down sales at Chinese food restaurants, our analysis shows pretty clearly that Americans haven’t begun to stop eating out at other types of restaurants — at least not yet.
Here’s a look at average weekly revenue in 2020 vs. 2019 at all types of restaurants across the country:
As you can see, all other types of restaurants started 2020 in the same boat as Chinese food restaurants, pulling in more weekly revenue than in 2019.
Unlike Chinese food restaurants, though, revenue has stayed ahead of 2019’s averages, spiking during the week of Valentine’s Day, and continuing the typical upward trend as spring approaches.
Obviously, it’s still quite possible that local restaurants of all types might suffer a drop in sales if anxiety about the outbreak continues, but there’s no question Chinese food restaurants are experiencing a much harsher reaction.
How has revenue at Chinese food restaurants (and all restaurants) been impacted in California, New York, and Washington?
California, New York, and Washington were the first three states to have more than 100 confirmed cases of COVID-19. So next we wanted to examine if Chinese food restaurants (and all other restaurants) have experienced more or less of an impact there than the national average.
Here’s what we learned:
California Chinese food restaurants, like those in the rest of the country, started the year on a high note, with average weekly revenue trending well above 2019’s averages. Then, like in the rest of the country, things dropped quickly as news of coronavirus began to spread.
By the end of January/early February, California Chinese food restaurants were earning 14% less in weekly revenue than at the same time last year. And while revenue is approaching 2019 levels again, they’re still well behind the highs experienced during the first of the year.
All other California restaurants, meanwhile, have seen little change in 2020 compared to 2019. So while California restaurants may be bracing for revenue to drop as COVID-19 precautions ramp up, Chinese food restaurants have clearly been struggling for weeks.
New York Chinese food restaurants have seen a particularly large drop in average weekly revenue as news of the virus began to spread.
As you can see, New York Chinese restaurants started the year averaging much closer to 2019’s figures in weekly revenue. But shortly after the first confirmed case of coronavirus hit the news, weekly revenue went from being 2% behind 2019’s average to a substantial 24% behind.
Things haven’t improved for New York Chinese food restaurants, either, as week 9 saw average weekly revenue lagging behind 2019’s average by 27%.
And this is certainly not the case for all restaurants in New York:
All restaurants in New York started the year pulling in more revenue on average than in 2019, and while the gap has narrowed slightly since COVID, there’s been a clear bias against Chinese food restaurants that other restaurants in New York aren’t experiencing nearly as strongly.
Finally, let’s take a look at the state of Washington.
Washington Chinese food restaurants have surprisingly bucked the trend so far. Week 6 in 2019 saw revenue drop precipitously, something that didn’t happen this year even after cases of coronavirus began to climb.
Average weekly revenue for all restaurants in Washington so far in 2020 looks remarkably similar to Chinese food restaurants as well, further suggesting that Washingtonians haven’t avoided Chinese food to nearly the same extent as diners in other parts of the country.
Other states where Chinese food restaurants have been particularly hurt by coronavirus fears
There doesn’t seem to be a direct correlation between significant outbreaks of COVID-19 cases and a drop in revenue for local Chinese food restaurants. Instead, it appears that it was merely news of the outbreak and subsequent baseless fears that kept people away from Chinese food restaurants.
As you’ll see in the examples below, this was proven out as we saw revenue drop at Chinese food restaurants in several states where confirmed cases of coronavirus were still weeks away.
While Chinese food restaurants in all corners of the country may well be suffering a drop in revenue, here are some more states where we saw significant drops in our analysis:
Chinese food restaurants in Florida started the year a hair behind 2019’s averages. Then, as news of COVID-19 spread, Florida Chinese restaurants fell far behind the seasonal rise in revenue they experienced last year.
Here’s another look at the difference in average weekly revenue at Chinese food restaurants in Florida:
This is not the case at all restaurants in Florida, however.
Unlike Chinese food places, all other restaurants in Florida have repeated last year’s seasonal trends almost exactly.
In 2019, Massachusetts Chinese food restaurants saw revenue climb steadily starting in February. This year, weekly revenue dropped after January and has stayed mostly flat.
Here’s another view of the difference between 2019 and 2020:
All other restaurants in Massachusetts, as is the case nationally, haven’t felt the affects of coronavirus fears, at least not yet.
As you can see, 2020 revenues have mostly mirrored 2019’s trends for all restaurants in Massachusetts.
Chinese food restaurants in Pennsylvania started the year pulling in weekly revenue averages just below 2019’s numbers.
As you can see, though, 2020 appeared to be following 2019’s trajectory until news of coronavirus began to spread. Then what was a slight year-over-year drop became a significant year-over-year drop.
Starting on the fifth week of this year, average weekly revenue has lagged between 15% and over 25% behind 2019’s averages.
As you can see in the chart above, all Pennsylvania restaurants have seen weekly revenue averages mirror 2019’s trends almost exactly. So, at least by week 9, cornoavirus fears hadn’t become widespread enough to affect sales at all restaurants like they have at Chinese food restaurants.
Utah is another state where the impact of coronavirus fears appear to be particularly hurting Chinese food restaurants.
As the chart above illustrates, weekly revenue in 2020 was strikingly close to 2019’s numbers for the first few weeks of the year. By week 5, things shifted dramatically.
After news of the coronavirus began to grow, weekly revenue at Chinese food restaurants dropped significantly behind 2019’s averages. Starting on week 5, Utah Chinese food restaurants have consistently pulled in around 20% less in weekly revenue than in 2019.
Mirroring the trend nationally, all restaurants in Utah have not appeared to experience the same kind of repercussions as Chinese food restaurants. Average weekly revenue at all Utah restaurants has consistently outpaced 2019’s averages, even after news of coronavirus began to spread.
The analysis conducted by Womply Research shows a striking and clear correlation between drops in average revenue at Chinese food restaurants across the country since the announcement of the first confirmed case of COVID-19 in the United States.
Conversely, Americans do not yet appear to be avoiding dining at or ordering takeout from all restaurants across the board. (At least not yet).
Of course, correlation does not equal causation, but the affects are pronounced enough to draw a strong conclusion that, at least in the first weeks following the coronavirus outbreak, many local restaurants were more impacted by xenophobia than by germophobia.
An important note, experts say that while it is possible to contract COVID-19 by eating food handled by an infected person, the risk is extremely minor. Experts say swallowing the virus is probably not an effective way to get sick, particularly when compared to the virus’s primary method of transmission, via infected droplets entering the nose or eyes.
Furthermore, Chinese food restaurants are NOT more likely to be a source of the virus than any other restaurant. So if you’re considering skipping Chinese food in favor of another cuisine, you’re only hurting your local Chinese food restaurant.
Finally, it goes without saying that as businesses and officials in the U.S. continue to take more drastic measures to combat the virus, that local restaurants may soon begin to experience the same type of drops in revenue that Chinese food restaurants have been experiencing for weeks. The Womply Research team will be continuing to analyze and report on local business data as the situation develops. Stay tuned for more reports soon.
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