Main Street Monday – 11% of Restaurants Anticipate Permanently Closing due to COVID-19
March 30, 2020
By Caity Witucki
Contributing Editor, Main Street Monday
Main Street Monday – 11% of Restaurants Anticipate Permanently Closing due to COVID-19
At the beginning of 2020, restaurants were the 5th most popular small business industry, employing nearly 10% of the U.S. workforce. However, according to new research from the National Restaurant Association, in just the last three weeks, the restaurant and foodservice industry has lost $25 billion and seen a 50% decline in sales. As a result, 7 in 10 restaurant operators have had to lay off employees and roughly 50% anticipate additional layoffs in the coming days.
The survey of more than 4,000 restaurant owners and operators conducted by the National Restaurant Association also found:
- Sales were down 47% during the period from March 1 to March 22.
- 54% of restaurant operators had switched to off-premises service only.
- 44% of restaurant operators have temporarily closed.
- 3% of restaurants have permanently closed and 11% anticipate permanently closing within 30 days.
To stay afloat during the COVID-19 outbreak, 54% of restaurant operators have temporarily changed their business model to off-premises only. However, not all restaurants are able to switch their operations to takeout and delivery. For example, restaurants that rely on local attractions to draw customers may see a steep drop in orders despite offering deliveries.
To support local restaurants and mitigate damage caused by COVID-19, Americans across the country participated in the “Great American Takeout” last Tuesday. The campaign encouraged people to support their local restaurant industry by ordering meals to-go. In addition, numerous cities have created fundraisers for out-of-work servers and restaurant staff. Although these campaigns have helped the industry, continuous support will be vital for the survival of many small business restaurants.
Sources:
National Restaurant Association
Guidant Financial