The restaurant industry in the United States took a hit last year due to the outbreak of the COVID-19 pandemic. As social distancing measures had to be put in place to curb the spread of the virus, dining in restaurants had to be halted as well. Although restaurants adapted to the challenges as online deliveries and curbside pickups gained precedence, and outdoor dining was implemented by many restaurants, the overall impact remained negative.
Nonetheless, the situation seems to be improving and the restaurant industry finally seems set to make a comeback this year with the retail sales in March bearing evidence of that. Notably, a CNBC article cited that the Commerce Department reported a rise of 13.4% in retail sales in the bar and restaurant industry in March. The article stated that this jump was due to the increasing relaxation of COVID-19 restrictions, thanks to the rapid vaccination drive in the country and the $1,400 stimulus checks that people received.
Markedly, the United States administered 3.3 million vaccine doses last week, as mentioned in a WPTA21.com article. This pick-up is sure to aid the restaurant industry in overcoming the challenges that have been plaguing it from last year. On a further positive note, President Joe Biden has also moved up the timeline for making adults eligible for vaccination in the United States. Notably, President Biden said that all American adults will be eligible for COVID-19 vaccination by Apr 19, as mentioned in a Reuters article.
In fact, the National Restaurant Association predicted that sales at U.S. eating and drinking places are set to jump 10.2% in 2021 to $548.3 billion, following a dip of 19.2% last year, as quoted in a Restaurant Business article. The article mentioned that factors like pent-up demand from last year, as people were denied the restaurant experience,, will drive the growth of the restaurant industry this year.
4 Stocks to Buy Now
The restaurant industry seems poised to make a comeback this year owing to the pent-up demand. Reflective of this, retail sales in restaurants and bars also saw a surge in March. Hence, this makes it a good time to invest in restaurant stocks that can make the most of this uptrend going forward. Notably, we have handpicked four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Darden Restaurants (NYSE:DRI), Inc. DRI, through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 22.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 26.5%.
Jack in the Box Inc. JACK operates and franchises Jack in the Box quick-service restaurants. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 13.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 38.1%.
Starbucks Corporation (NASDAQ:SBUX) SBUX, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 0.4% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Chuy's Holdings (NASDAQ:CHUY), Inc. CHUY, through its subsidiaries, owns and operates full-service restaurants under the Chuy's name. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 9.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 34.5%.
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