The numbers cited in their message, though depressing, gave a vivid reality to what we’d only absorbed from anecdotal sources (the release is reprinted in its entirety below). Even in the best of circumstances, the restaurant business is a precarious way to make a living. Since the government-mandated shutdowns intended to stem the spread of the coronavirus, many restaurants have struggled desperately to adapt. Some have tried to survive by preparing food only for take-out orders. Others fortunate enough to have some outdoor space have attempted to make a go of things by converting to alfresco dining. Creative—maybe even heroic—these measures are less than ideal. How many waiters or waitresses can a place employ when service is reduced to handing a customer a paper sack of food at the front door? How many of these servers could survive on the tips such conditions would allow, anyway? Outdoor dining? It might not have made for a comfortable lunch on an August day in Phoenix, and it sure wouldn’t be conducive to a pleasant December dinner in Duluth.
No doubt, some of the 100,000 restaurants the NRA says have closed lately, would have shut their doors anyway. As we said, the restaurant biz has always been risky. But the cost of the shutdown is devastating to the restaurant industry, which is a significant part of the American economy.
I wonder about all this when shopping in grocery stores, none of which seem to be under such restrictions. I wear a mask when entering and all the employees have similar masks. We try to keep a six-foot space between us. But for the face coverings and a little social distancing, it all seems to be business-as-usual. People grew and handled the produce I buy at the market. Butchers and fishmongers handled the meat and fish. Frozen and canned foods were prepared by humans and they were handled by other humans when they went onto the stores’ shelves and into their freezers. How much safer is this system than the now-forbidden restaurant experience, I wonder.
100,000 Restaurants Closed Six Months into Pandemic
September 14, 2020
Washington, D.C. – Six months following the first shutdown of restaurants for the coronavirus pandemic, the restaurant industry is in limbo. According to a new survey released today by the National Restaurant Association, nearly 1 in 6 restaurants (representing nearly 100,000 restaurants) is closed either permanently or long-term; nearly 3 million employees are still out of work; and the industry is on track to lose $240 billion in sales by the end of the year.
The survey, which asked restaurant operators about the six-month impact of the pandemic on their businesses, found that overwhelmingly, most restaurants are still struggling to survive and don’t expect their position to improve over the next six months. The findings include:
Consumer spending in restaurants remained well below normal levels in August. Overall, sales were down 34% on average.
Association analysis shows that the foodservice industry has lost $165 billion in revenue March–July and is on track to lose $240 billion this year.
Our research estimates that for 2020, at least 100,000 restaurants will close, but the initial scope of closures won’t be known until government statistics are released in the months ahead.
60% of operators say their restaurant’s total operational costs (as a percent of sales) are higher than they were prior to the COVID-19 outbreak.
On average, restaurant operators say their current staffing levels are only 71% of what they would typically be in the absence of COVID-19.
In a recent consumer survey, 56% of adults said they are aware of a restaurant in their community that permanently closed during the pandemic.
Sean Kennedy
“For an industry built on service and hospitality, the last six months have challenged the core understanding of our business,” said Tom Bené, President & CEO of the National Restaurant Association. “Our survival for this comes down to the creativity and entrepreneurship of owners, operators, and employees. Across the board, from independent owners to multi-unit franchise operators, restaurants are losing money every month, and they continue to struggle to serve their communities and support their employees.”
The survey also found that 40% of operators think it is unlikely their restaurant will still be in business six months from now if there are no additional relief packages from the federal government. The Association highlighted this for Congress and the Trump Administration in a letter sent today, asking them to use bipartisan support to pass small business programs in stand-alone bills.
“This survey reminds us that independent owners and small franchisees don’t have time on their side,” said Sean Kennedy, executive vice president of Public Affairs for the Association. “The ongoing disruptions and uncertainty make it impossible for these owners to plan for next week, much less next year. Congress is about to leave Washington for the elections – we need them to focus on the short-term, basic solutions that have secured bipartisan support and passed one or both chambers. We urge immediate passage of these while we work with lawmakers on the comprehensive elements of our ‘Blueprint for Restaurant Revival.’
“The foodservice industry was the nation’s second largest private sector employer and pumped more than $2 trillion into the economy right up until our sudden shutdown,” Kennedy continued. “Making an investment in an industry that consumers love and that powers the economy is a good business and economic move for Congress as they search for the biggest bang for their recovery buck.”
Learn more about the Association’s recovery proposals in the Blueprint for Restaurant Revival.