NewsWire: 12/01/2020
- Fast-casual salad chains like Sweetgreen and Freshii are among the restaurants that have been hit hardest by the pandemic. Not only are they seeing a lot less lunch-hour foot traffic, they’re also finding that a lockdown-bound workforce doesn’t really crave takeout salads. (Marker)
- NH: Salad restaurants are hurting big time. Freshii, a Toronto-based salad chain, saw its sales fall by 51.4% in Q2’20. Their stock (FRII) is down 38% YoY. And Sweetgreen, a fast-casual salad chain, is set to lay off 20% of its corporate staff.
- Pizza companies, on the other hand, have been booming. Domino’s (DPZ) stock is up over 32% YoY. Papa John’s (PZZA) stock is up over 27% YoY. And even Yum! Brands (YUM), which owns Pizza Hut and has been struggling for years, has seen its stock rise by a modest 5% YoY.
- So why are people eating pizza rather than salad? There are a few logistical reasons. Pizza was designed for takeout, which gives it a natural advantage when carryout and delivery have become the only options for customers. Salad chains, on the other hand, were designed for in-person ordering where consumers see the ingredients and choose what they want. With online orders, consumers can't see the veggies' freshness, creating uncertainty over the quality of the food. Additionally, salad chains are often located near office buildings, which have been empty since March. Covid-19 has severely reduced foot traffic.
- But there is also a biological factor at play. Health professionals have long known there is a link between stress and unhealthy eating. In stressful situations, the body produces cortisol to fuel fight-or-flight responses. But after this effect goes away, your body craves sugary, salty, and fatty foods to recover. Chronic stress is thus associated with weight gain.
- We have written in the past that two contradictory trends are driving Americans' diets during the pandemic. (See “Is Covid-19 Making Us Eat Healthier?”) On the one hand, Americans are preparing more food than ever before. And homemade food is generally healthier and less processed than restaurant fare. On the other hand, stressed-out Americans are also snacking and buying more junk food than ever before. So are Americans' diets healthier than before the pandemic began? If the war between pizza and salad is any indicator, unhealthy stress eating may be winning.
