More Than 500,000 Restaurants Are In Freefall

Restaurants are struggling and the latest lockdowns add to the misery.

Economic Freefall 

The National Restaurant Association reports 110,000 Restaurants Have Closed Permanently during the COVID-19 pandemic.

Since the COVID-19 pandemic began in March, 17% of restaurants (or about 110,000 establishments) have closed either permanently or long-term, and 10,000 restaurants have closed over the last three months alone, according to the National Restaurant Association’s December data released on Monday. 

Letter to Congress

The National Restaurant Association sent a Letter to Congress, including House Speaker Leaders Nancy Pelosi, Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, and House Minority Leader Kevin McCarthy.

Letter Details 

  • 87% of full-service restaurants (independent, chain, and franchise) report an average 36% drop in sales revenue. For an industry with an average profit margin of 5%-6%, this is simply unsustainable.
  • 59% of operators say their total labor costs (as a percentage of sales) are higher than they were pre-pandemic.
  • We predict that as of today, 17% of restaurants—more than 110,000 establishments—are completely closed.  
  • The vast majority of permanently closed restaurants were well-established businesses and fixtures in their communities. On average these restaurants had been in business for 16 years, and 16% had been open for at least 30 years.
  • Only 48% of these former restaurant owners say it is likely they will remain in the industry in any form in the months or years ahead.
  • What these findings make clear is that more than 500,000 restaurants of every business type— franchise, chain, and independent—are in an unprecedented economic decline. 

Congressional Bickering Since September

The letter includes a wish list of priorities for the next pandemic package.

This plea was sent to Congress at the same time that restaurants are speaking out in various areas around the country where restrictions on restaurants have gotten more stringent as cases continue to rise, including in California, where Gov. Gavin Newsom passed a three-week stay-at-home order (including shutting down outdoor dining) for parts of the state.

1 2
View single page >> |

Disclaimer: The content on Mish's Global Economic Trend Analysis site is provided as general information only and should not be taken as investment advice. All site content, including ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.