Yum! Brands (NYSE: YUM), the $28 billion bellwether for the fast-casual restaurant industry, disclosed to regulators today that 92% of its North American restaurants have reopened. It has reopened over 1,000 locations within the last week.
Shares of the publicly traded Pizza Hut, Taco Bell and KFC owner have rallied 70% off their March 23 lows. That increase roughly aligns with U.S. search interest in “Taco Bell” per Google Trends, which has similarly rallied 63% since March 23.
“Trends have improved meaningfully in recent weeks,” said Senior Vice President David Russell today. “We experienced a peak of restaurant closures in early-April when approximately 30% of our international KFC restaurants and 25% of our international Pizza Hut restaurants were closed. These closures contributed to a peak global temporary closure count of approximately 11,000 restaurants.”
Russell continued, “Our KFC and Pizza Hut businesses in the U.S. have benefited significantly in recent weeks from their strength in the dinner daypart as sought after delivery and carry-out options. In early May, Pizza Hut U.S. recorded its highest delivery and carry-out average sales week in the past eight years. Similarly, in early May KFC U.S. recorded the highest average sales per store in a week in brand history.”
Seated diners from OpenTable’s online, phone, and walk-in reservations for U.S. restaurants are still 75% below 2019 levels, as of today. Yet fast-casual restaurants like Pizza Hut, Taco Bell and KFC have been one of the fastest groups to recover.
Restaurants rehired 1.4 million workers during the month of May, easing some of the job losses from March and April. The U.S. Bureau of Labor Statistics estimates 6 million restaurant industry-wide job losses during March and April, with other estimates as high as 8 million.
Corporately-owned chain restaurants support several million workers, and despite their strong growth, they are far smaller than franchisee-owned and independently-operated restaurants. According to a new report released today, independent restaurants “directly employ 11 million people across the country” and indirectly support an additional five million jobs throughout their supply chains. Independent restaurants generate $760 billion in annual sales.
According to the report, revenues at independent restaurants remain 60% lower than 2019 levels. COVID-19 closures of independent restaurants have caused 4.5 million job losses, accounting for “a quarter of the increase to the U.S. unemployment figures since February, figures that have not been seen since the Great Depression.”
The coronavirus pandemic is far from over, with 17,376 new cases added today within the U.S. and total deaths of 112,133. Total cases are nearing 2 million for the full year. All 50 states now allow some form of reopening of restaurant dining areas.