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As Consumer Spending at Big Chains Bounces Back, Independent Restaurants Are Left in the Lurch

Plus, Starbucks will require face masks in all its stores, and other news to start the day

Hands reaching to grab a McDonald’s order from drive-thru window.
Major chains like McDonald’s have the advantage of drive-thrus and other features of fast food.
Photo: Deman/Shutterstock

Study shows that big chains are financially recovering much faster than small or independent restaurants

Consumer spending at big restaurant chains have largely bounced back to pre-pandemic levels, but small chains and independent restaurants have a much longer road to recovery, according to a recent study by the Bank of America.

Using data from Bank of America credit and debit card holders, analysts found that on July 1, the average spend at large chains was down by just 4 percent compared to the same period last year, while spending was down 25 percent at small chains and independent restaurants, CNBC reports. This gap of about 20 to 25 percent has been consistent since late March, when restaurants nationwide began closing or ending dine-in service.

Major chains — which already run the gamut from limited-service (a.k.a fast food) to full-service dining versus the full-service or quick-casual dining — have the advantage of being able to offer fast food, drive-thrus, and outdoor seating, as NRN notes.

The persistent gap in consumer spending across the restaurant industry highlights the uncertain future that many small chains and independent restaurants face, as government aid trickles to a close and people across the country continue to test positive for COVID-19.

And in other news…

  • Five Guys fired employees from a location of the chain in Alabama after the workers refused to serve a group of police officers. There have been more protests of this kind by service workers in the wake of national demonstrations against anti-Black police violence and brutality. [Insider]
  • Starbucks is requiring all customers to wear face masks inside its stores starting on July 15. The coffee giant is the first major food/drink chain to adopt such a policy. [Restaurant Business]
  • Gordon Ramsay applied to register the trademark “Gordon Ramsay Burger” — the name of his casual burger restaurant in Las Vegas — in the U.K., suggesting the possibility of plans to launch a burger chain. [Daily Record]
  • The coronavirus pandemic has exacerbated an already worsening hunger crisis, with potentially dire effects, according to a new report by global poverty charity Oxfam. [CNN]

All AM Intel Coverage [E]

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