Below is a brief excerpt from a complementary research note written by our Consumables analysts Howard Penney and Daniel Biolsi. We are pleased to announce our new Sector Pro Product Consumables Pro. Click HERE to learn more.
Few have returned to the office
A survey conducted by the Partnership for NYC reported that Manhattan offices are operating with 10% of last year’s personnel.
The survey results said only 15% of Manhattan office employees are expected to return by year-end, down from 26% back in August. By July 2021, 48% of respondents expect to be back in the office.
39% of those will work remotely half the time. New York City is last among big cities for the percentage of workers back in offices. According to Kastle Systems International, across the ten largest cities, about 25% of employees have returned to the office. At the high end, 41% in Dallas and 32% of Los Angeles office workers are back at work compared to 16% in Chicago and 14% in San Francisco.
The location where office workers are operating is a key factor in the recovery pace for food away from home consumption.
Restaurant closings and doubtful account reserves
At least 1,000 restaurants have closed since the pandemic began in March. According to a survey from the New York State Restaurant Association, as many as two-thirds of the state’s restaurants could close permanently by the end of the year if they do not receive government aid.
The National Restaurant Association estimates that at least one in six restaurants has closed nationwide this year. Many in the restaurant industry are asking for another relief bill from Congress. Spending at restaurants had been slowly recovering until the most recent increase in restrictions in many states.
According to the Census Bureau, spending at restaurants and bars was $65.4B in February, dropped to $30B in April, and most recently in October, reached $55.6B.
Restaurant distributors have seen an improvement in their receivables collections since earlier in the pandemic. Sysco recorded a $98.6M improvement in its reserve for doubtful accounts in the most recent quarter.
Over the two most recent quarters, US Foods reversed $105M of the incremental $170M in reserves recorded in the quarter ended March 28. If the closure rate were to increase again, reserves would have to be increased as well.