Approximately 100,000, or nearly 1 in 6 restaurants, are closed either permanently or for the long term, according to new data from a National Restaurant Association survey released today. Adding to the bad news, the Association reports that 3 million restaurant workers are still out of work and projects that the industry is on track to lose $240 billion this year.
The news comes six months into the COVID-19 pandemic that continues its sustained presence here in the U.S. The restaurant industry was hit particularly hard, especially in the early months of the pandemic as state and local governments across the country forced closures of restaurant dining rooms. Many restaurants have re-opened, but at a reduced capacity and with greater reliance on off-premises formats like delivery and takeout.
The Association’s survey asked restaurant operators about the six-month impact of the COVID pandemic, and discovered that most restaurants are hanging on by a thread and don’t see a bright outlook over the next six months.
Specific findings from the Association’s survey include:
- Restaurant sales were down an average of 34 percent.
- The foodservice industry lost $165 billion in revenue between March and July and is on track to lost $240 billion this year.
- The majority (60 percent) of restaurant operators say that their operational costs are higher now than pre-pandemic.
- Restaurant staffing levels are at 71 percent of what they would normally be.
- Forty percent of operators doubt that their restaurant will be in business six months from now without additional assistance from the U.S. government.
The survey adds more data that continues to paint a bleak outlook for the restaurant industry. In July, a Yelp survey found that 60 percent of closed restaurants were shuttered permanently.
The bad news won’t just end with restaurant closures, however. There is an entire tech industry built on the backs of restaurants including POS software, inventory management, staffing, and delivery integration, not to mention the equipment and other hardware manufacturers.
The permanent shuttering of so many restaurants could also lead to less diversity and further consolidation of the restaurant biz — in other words, fewer local sandwich shops and more Subways and other chains that have the size and revenue to withstand this tumult.
In response to the tumult, restaurants large and small have turned to all manner of solutions, from ad hoc drive-thrus to ghost kitchens to creative attempts at outdoor dining. All these efforts should be applauded. None of them guarantee the future of the dining room or the independent restaurant. Like the Association’s survey today, they suggest that the last six months have forever altered the restaurant experience as we knew it.
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