Eating places see a brand new wave of coronavirus restrictions as U.S. instances hit document excessive

Restaurants are facing a new wave of restrictions, posing yet another obstacle in their attempts to stay afloat and recover from the coronavirus pandemic.

New daily Covid-19 cases in the United States hit a record high of 88,521 on Thursday, according a CNBC analysis of data from Johns Hopkins University.

“We’re starting to find ourselves on a steep slope of the epidemic curve, so I think you’re going to see cases accelerate,” former Food and Drug Administration Commissioner Dr. Scott Gottlieb said Friday on CNBC’s “Squawk Box.” “There’s about 15 states where the positivity rate’s above 10%, the reproduction number is greater than 1 in all 50 states right now.”

The positivity rate shows the percentage of tests for the coronavirus that come back positive, while the reproduction number is a way of gauging Covid-19’s ability to spread. Both of these numbers suggest a rapid increase ahead.

The surge in cases has led some areas of the country to reimpose tighter restrictions on dining. Indoor dining is once again banned at Chicago restaurants, starting Friday. In Denver, restaurant capacity has been slashed from 50% to 25% and last call for alcoholic drinks is now 10 p.m.

In Europe, which is facing a second peak of infections, countrywide dining mandates are happening once again. France is reentering lockdown, which includes temporarily shuttering businesses considered nonessential, like bars and restaurants. Germany’s eateries and bars will close for one month, starting Nov. 2, in a partial lockdown.

While the pandemic has stretched on, restaurants and their out-of-work employees have been left waiting for another stimulus package from the federal government. Loans given to eateries through the Paycheck Protection Program have since run out, and September’s unemployment rate of 7.9% means many consumers don’t have the cash to spare on dining out.

Chain restaurants are bouncing back more quickly than independent establishments, but the uncertainty around the surge of Covid-19 cases makes forecasting their recovery even more difficult.

Starbucks, for example, said Thursday that 63% of its U.S. cafes have limited seating. The coffee chain expects to return to same-store sales growth by the end of its fiscal second quarter in March, but that forecast assumes that cafe seating and operating hours will near full capacity by that time.

Some full-service restaurant companies, like Texas Roadhouse and Darden Restaurants, have tied their sales recovery directly to loosened dining restrictions.

And cold weather means that many restaurants that have relied on patio dining will take a hit. A Bank of America survey of 1,000 consumers found that 60° Fahrenheit is the cutoff temperature for most diners. Cheesecake Factory’s reliance on outdoor dining led the bank to downgrade its stock in August.

Taking the new restrictions in stride will be easier for fast-food chains, whose reputation for convenience and low prices helped the sector rebound faster than the broader industry. Yum Brands’ Taco Bell, for example, saw 30 million more customers order its food via drive-thru lanes during the third quarter compared with the same time a year ago.

“We know it’s a fluid environment, and that as we’re seeing in Europe, it’s just not an environment where we can predict and guide for 2021,” Yum CEO David Gibbs told analysts on Thursday. “We do have confidence in our team based on how they recovered so far, and that whatever thrown our way, we’ll be able to pivot to it.”

And for the rare restaurant that has thrived during the pandemic, new restrictions don’t pose a threat. Wingstop has seen its sales surge during the crisis, despite its dining rooms remaining closed for more than seven months. The chicken wing chain is instead relying on its tech investments and popularity with customers ordering food delivery.

“Highlighting the strength of our business model, we’ve experienced positive results throughout the pandemic, with Q3 2020 same-store sales growth totaling 25.4%,” spokesperson Megan Sprague said in a statement to CNBC.

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