100,000 Restaurants Closed Six Months into Pandemic
USAgNet - 09/16/2020
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.
"For an industry built on service and hospitality, the last six months have challenged the core understanding of our business," said Tom Bene, 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.
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