100,000 Restaurants Could Close By The End Of The Year. Here's Why
If you've been taking advice from health experts like Dr. Anthony Fauci, who has repeatedly advised us to get takeout instead of eating out, we might not have been paying too much attention to the restaurant scene around us. But perhaps it's time we did, because according to the National Restaurant Association, after nearly six months into the pandemic, 1 out of every 6 restaurant has closed — either permanently or long term — as a result, nearly 3 million restaurant workers don't have work. The industry group also estimates that by the end of 2020, the country could see the shutdown of 100,000 restaurants, and a loss $240 billion in sales.
"For an industry built on service and hospitality, the last six months have challenged the core understanding of our business," Tom Bené, President & CEO of the National Restaurant Association said in a press release. "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."
It still isn't business as usual for the restaurant industry
The situation didn't return to normal as restaurants might have hoped after shelter-in-place orders and lockdowns eased. The NRA says 60 percent of restaurant operation costs are higher now than they were before the pandemic, even though staffing levels are at 71 percent of what they were, pre-COVID. Meanwhile, customer spending is down 34 percent on average.
To try and save the industry, the NRA has created a blueprint for survival, where it has proposed measures including the creation of a Restaurant Recovery Fund to help keep restaurants stay afloat, rehire, and reopen, and build on the Paycheck Protection Program (PPP) which was first enacted when the pandemic took hold and which offered conditional bailouts to restaurants. Another hope is that the government makes PPP loans tax deductible and that they set up a loan program that goes beyond the PPP.
Customers could patronize restaurants if the circumstances were right: survey
There is a small ray of hope. A recent survey by The Coca Cola Company and reported by Restaurant Business shows that there could be more scope for restaurants to get creative in ways that could bring customers back and generate revenue in the process. These ideas include offering groceries and meal kits, offering outdoor seating, combining promotions with local retailers, and making beer and alcohol available for delivery.
This may not be too much of a challenge for restaurants, which have already had to get their thinking caps on when the pandemic forced people indoors — a good number chose to spin off and offer new services that included curbside pickup, online cooking classes, as well as meal kits, as a result.