100,000 Restaurants Lost to COVID

Photo: Mika Baumeister/Unsplash
Photo: Mika Baumeister/Unsplash

The National Restaurant Association has released results of a survey that indicate that six months after the start of the pandemic as many as 1 in 6 restaurants have closed in 2020.

That number represents 100,000 restaurants that would be either closed permanently or for the long-term, the association said.

The trade group is reporting also claims that 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 association is using this data as support as it urges Congress and the Trump administration to use bipartisan support to pass small business programs in stand-alone bills.

The survey focused on how operators are doing six months after the beginning of the pandemic most restaurants are still struggling to survive – and don’t expect their position to improve over the next six months. The findings also include:

  • Consumer spending was down 34% on average against normal August levels.
  • 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.
  • The association predicts that at least 100,000 restaurants will close, but will not know the total until government reports are released.
  • 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.
  • 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.

“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.

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.”



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