Small Business News
National Restaurant Association Survey Finds 1 in 6 Restaurants Remain Closed
If you’ve noticed that a number of your local restaurants have stayed closed since the pandemic struck, you’re certainly not alone. In fact, 56% of Americans surveyed said that locations in their community had closed for good. Moreover, as the National Restaurant Association reports, these closures could worsen in the coming months.
According to the Association’s survey, one out of six restaurants in the United States remain closed (either permanently or long term) six months after the COVID-19 pandemic led to lockdowns in many parts of the country. That figure amounts to nearly 100,000 locations. As a result, as many as three million jobs have been impacted. Additionally, the restaurant industry as a whole is currently projected to lose a total of $240 billion in sales for 2020 due to the pandemic after already missing out on an estimated $165 billion in revenue from March through July.
Beyond the closures, small business and restaurant owners continue to struggle after reopening. For last month, restaurateurs reported that sales had dropped by an average of 34%. In terms of employment, owners indicate that their current staffing is about 71% of what it would be otherwise. Nevertheless, 60% of those surveyed said that their operating costs as a percentage of sales had increased since reopening.
Unfortunately, the prognosis ahead isn’t looking very promising either. Of those surveyed, 40% believe their restaurants will be out of business in the next six months unless there is greater government support. To that point, the National Restaurant Association has compiled what it calls the Restaurant Industry Blueprint for Revival. Among the top relief efforts the blueprint calls for is the establishment of a Restaurant Recovery Fund, making Paycheck Protection Program funds tax-deductible, expanding the Employee Retention Tax Credit, providing liability protection for small businesses, and more.
Reflecting on the survey results and the tough times for restaurant owners in general, National Restaurant Association president and CEO Tom Bené said in a statement, “For an industry built on service and hospitality, the last six months have challenged the core understanding of our business. Our survival for this comes down to the creativity and entrepreneurship of owners, operators, and employees.” He added, “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.” Meanwhile, the Association’s VP of public affairs Sean Kennedy pointed out the impact that Congressional intervention could have on relief, stating, “The food service 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. 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.”
Like many small businesses in the United States, it’s clear that restaurants are continuing to struggle. Not only are some still unable to open given the conditions but even many of those that have returned to business are experiencing greater costs and lower sales. Therefore, hopefully Congress can work through their current impasse and offer more relief to small businesses, restaurants, and everyday Americans soon.
