Bar sales plummet following state closures (BUD)
Florida, Texas, Colorado, and Arizona closed bars in response to increasing numbers of COVID-19 infections last week. California and Michigan closed bars in several counties, covering a majority of state residents. Bar sales decelerated from -35% on June 25 to -62% on July 1, according to Womply, a CRM provider. The impact on local bar sales can be seen in the following chart:
Globally on-premise represents 1/3 of Anheuser Busch In Bev sales, but in the US, it is roughly 17%.
Beef for Dad (TSN)
Father’s Day generally drives an increase in beef sales, but this year’s boost was much more significant than in year’s past. For the week ended June 21 (Father’s Day weekend), beef sales increased 31.9% with volumes up 13.5% and pricing/mix up 18.4%. Year to date meat department sales through June 21 were up 24.4% according to IRI, with volumes up 15.6%. 20% of consumers ran into out of stocks when looking to purchase meat or poultry over the week. 38% of consumers used meat stored in their freezers while 31% bought a different type of meat, 24% went back to the retailer on another day while 23% went to another retailer for the beef they intended to purchase. 57% of those who buy seafood that week said they did so because of limited meat availability.
Restaurant closures jump (SYY)
While the three most populous states closed bars last week, restaurants were allowed to remain open with a reduction in dine-in capacity. According to Womply, a CRM provider, 33% of local restaurants are closed as of July 1, up from 20% on June 28, as seen in the following chart. The jump in restaurant closings reflects the difficulty the industry has had the following rules in flux. Both New York and New Jersey delayed the reopening of indoor dining days before their planned reopening last week. Many restaurants have also closed after employees and guests have tested positive for the novel coronavirus. Independent restaurants are Sysco’s most profitable customer group, and a high closure rate would represent a significant challenge for the company and its ability to reach past sales and earnings. Sysco is the best idea short.
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