Fed: Outdoor dining tied to third of restaurant sales
Photo | Grant Welker
Welly's Restaurant on Main Street in Marlborough.
Alfresco dining has become an important part of the restaurant industry in Massachusetts, having "dramatically increased" when state government prohibited indoor dining to slow the spread of the coronavirus, analysts at the Federal Reserve Bank said.
In its latest Beige Book, which draws information from banking and business contacts, the Fed highlighted that more than a third of restaurant sales in Massachusetts this summer came from outdoor dining, which it said "is unusual in Massachusetts where fewer than 20 percent of restaurants had outdoor dining options before the pandemic."
While restaurants in coastal areas operated at roughly 75 percent of typical sales on average through the summer months, the Fed said that restaurants in Boston are "faring worse than the rest of the state."
Restaurants were allowed to resume indoor dining in June, but many eateries have expanded into outdoor spaces in order to serve customers who might not yet be comfortable venturing indoors for a meal during the pandemic.
Even as overall business activity picked up in July and early August, the outlook among Massachusetts-area businesses remains "highly uncertain," the Fed said. Its observers also noted that the region is slightly more optimistic about the future than three months ago. Beige Book authors wrote that business conditions in the region -- which covers all of New England except one Connecticut county -- vary by industry and geography.
"Business activity continued to pick up modestly in the First District in July and early August, even as some sectors saw little improvement. Some retailers cited strong activity, while air travel and hotels remained very soft," analysts wrote. They added, "Employment changes were mixed. Retail contacts selling autos and furniture brought back almost their entire workforces after layoffs and furloughs in the spring. By contrast, many hotel workers remained furloughed, particularly food and beverage staff that typically work larger functions."
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