Why Dine-In Restaurants Are Plunging After New Texas COVID-19 Mandate

The week's trading is ending on a sour note for restaurants with a business model heavily reliant on dine-in, such as The Cheesecake Factory (NASDAQ: CAKE) or Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) after the state of Texas announced an executive order today limiting restaurant, bar, and other business operations. The Lone Star State's move comes as a rapid uptick in COVID-19 cases after reopening causes fears of the pandemic's return to full strength.

The executive order from Governor Greg Abbott closes bars and all other businesses earning more than 51% of their gross take from alcohol sales, except for take-out and delivery sales. The order also mandates that restaurants must begin operating at a maximum of 50% dine-in capacity starting next Monday, June 29. It shutters tubing and rafting businesses outright and bans outdoor gatherings of 100 or more without special permission.

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Source Fool.com