Restaurant stock values are negatively impacted by coronavirus
The restaurant industry was severely impacted by stock market action on March 12, as the share prices of multiple companies experienced double-digit percentage declines. Undoubtedly, the COVID-19 pandemic has had a detrimental impact. According to a report by Technomic, Chicago, consumers may be cutting back on their restaurant visits for some time to come.
Sysco Corp., a Houston-based company, saw a 21% decline in share price on the New York Stock Exchange, closing at $43.51 on March 11. On March 12, the stock hit a 52-week low of $43.49 during the day. Leading the way in the marketing, sales, and distribution of food items to eateries, medical and educational facilities, hotels, and other clients that cook meals away from home is Sysco Corp.
According to the Technomic article “Coronavirus, the foodservice view,” which was published on March 5, drive-thrus reduce human-to-human interaction, therefore the impact of the coronavirus outbreak may not be as great for limited-service restaurants as it is for full-service restaurants.
The NYSE closed on March 12 at $35.00 per share for DineEquity, the company that owns the Applebee’s and IHOP brands. This was a 32% decrease from the close of $51.34 per share on March 11. Prior to March 12, the 52-week low per share was $50.87, which was attained on March 11 during the day.
The brands Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze Island Grille, and Eddie V’s Prime Seafood are owned by Darden Restaurants, Inc., located in Orlando, Florida. On March 12, the company’s NYSE stock price finished at $59.17 per share, a 16% decrease from the closing price of $70.21 per share on March 11. On March 12, a 52-week low of $57.27 was noted during the day.
Technomic reports that delivery-focused restaurants, such as pizza companies, may benefit from the coronavirus outbreak.
Delicious! NYSE closing price for Louisville, Kentucky-based Brands, Inc. on March 12 was $78.45 a share, down 3% from $80.97 on March 11. Even with the day’s trading price of $74.61 per share on March 12, it was still below the 52-week low. Delicious! Taco Bell, Kentucky Fried Chicken, and Pizza Hut are owned by brands.
Chipotle Mexican Grill, Inc., located in Newport Beach, California, announced on March 12 that it will provide free delivery on any purchase between $10 and $200 placed through the Chipotle app and Chipotle.com from March 15 to March 31. To help guarantee that food is untouched throughout delivery, Chipotle will be using a new, tamper-evident packaging seal on all deliveries. Chipotle’s share price dropped almost 7% to $603.00 on March 12 on the New York Stock Exchange from $646.39 on March 11. The 52-week low was reached on March 12 during the day at $565.01.
Starbucks Corp., a Seattle-based company, saw a 9% decrease in share price from $68.30 on March 11 to $62.10 on March 12 on the Nasdaq. On March 12, a 52-week low of $61.47 was noted during the day. According to the Seattle Times on March 12, 31 deaths in Washington state were reported to have been caused by the coronavirus outbreak. Due to health concerns associated with the coronavirus outbreak, the annual meeting of Starbucks scheduled for March 18th will only be conducted virtually.
On March 12, the 52-week lows for McDonald’s Corp., Jack in the Box, Dunkin’ Brands Group, Inc., and Restaurant Brands International, Inc. were all reached.
McDonald’s Corp., Chicago’s NYSE stock price closed at $170.13 per share on March 12, over 10% less than it closed at $188.25 on March 11. On March 12, Jack in the Box, located in San Diego, ended at $39.65 per share on the Nasdaq, a 16% decrease from $47.11 per share the previous day. On March 12, Dunkin’ Brands Group, Inc., located in Canton, Massachusetts, closed at $54.46 a share, a 15% decrease from the previous day’s closing of $64.25.
On March 12, Restaurant Brands International, Inc., a Toronto-based company, finished at $42.73 per share, a decrease of over 10% from the closing price of $47.80 per share on March 11. Popeyes, Tim Hortons, and Burger King are among the Restaurant Brands International brands.
The Technomic analysis states that there is potential for self-delivery and third-party order delivery in the foodservice industry. Given that consumers would have to frequent supermarkets, this tendency may lead to a rise in the amount of foodservice items purchased during grocery shopping excursions.
In order to gather information for the Technomic report, 1,000 customers were contacted between February 28 and March 2 and asked about their attitudes, behaviors, and potential responses to a more widespread outbreak. The author was managing principal Joseph Pawlak.
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In response to a question about their likely actions as a result of the coronavirus, 52% of respondents said they would avoid crowds. This was higher than the responses of 32%, 32%, and 13% who said they would leave the house less frequently, eat out less frequently, and order more deliveries.
When asked how long they thought the coronavirus may keep them from dining out as much, 31% said it would be one to three months, 25% said it would be three to six months, 20% said it would be less than a month, 16% said it would be more than six months, and 12% said it would be permanently.
According to the survey, 66% of participants stated they were keeping up with news reports on the coronavirus outbreak. This percentage was higher than that of the Democratic primary (45%), the Kobe Bryant tragedy (39%), the impeachment process (38%), and stock market volatility (33%).
Of those surveyed, 30% said they believed the news was being exaggerated, and 45% disagreed. An additional 25% expressed uncertainty about their thoughts regarding the overall effect. 86% of Americans who were closely following the coronavirus story stated that it was significant to them personally, and 82% predicted that it would eventually have a negative impact on the US economy.
In response to the coronavirus, 84% of restaurant operators suggested giving sick staff time off, 58% advised thoroughly cleaning food and utensils, and 37% suggested carrying on as usual.