News and Commentary

National Restaurant Association: 11% Of Restaurants Could Be Lost In Pandemic
TOLEDO, OH - MARCH 24: A sign stating that a restaurant is closed is seen during the stay-at-home order issued by Ohio Gov. Mike DeWine during the coronavirus COVID-19 outbreak on March 24, 2020 in Toledo, Ohio.
Scott W. Grau/Icon Sportswire via Getty Images

The National Restaurant Association delivered some deeply upsetting news this week when it predicted that the COVID-19 pandemic could force up to 11% of restaurants to close up shop for good.

In a post to the organization’s site on Wednesday, the National Restaurant Association said that as many as 3% of restaurant owners have already permanently closed in response to the pandemic while 44% have temporarily closed. In the next 30 days, a full 11% of restaurants will close permanently. According to a survey of 4,00 restaurant owners and operators, the data showed the following:

  • Nationwide, sales were down 47% during the period from March 1 to March 22
  • 54% of restaurant operators have switched to off-premises service only
  • Seven in 10 operators have had to lay off employees and reduce the number of hours worked
  • Roughly half of them anticipate more layoffs and hourly reductions over the next 30 days
  • More than six in 10 said they’ve had to reduce their operating hours

Hudson Riehle, the Association’s senior vice president of research, said the data shows we are in “uncharted territory.”

“Association research found that 54% of operators made the switch to all off-premises services; 44% have had to temporarily close down. This is uncharted territory,” said Riehle. “The industry has never experienced anything like this before.”

Making matters worse, President Trump dropped his usual optimistic attitude his Thursday press conference by agreeing with the association’s assessment of the situation, given his understanding of the restaurant industry.

“It’s a very delicate business. It’s a business that is not easy,” Trump said, as reported by Fox News. “I always say in the restaurant business, you can serve 30 great meals to a person, or a family, and they love it. One bad meal, No. 31, they never come back again. It’s a very tough business.”

On a more cheerful note, the president said that those restaurants lost will “all come back in one form of another.” He referred to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provides nearly $350 billion in relief to small businesses impacted by this pandemic.

“And we’re making it easy for people,” he added. “Look, what we’re doing in terms of loans, what we’re doing in terms of salaries, they’ll all come back. It may not be the same restaurant, it may not be the same ownership, but they’ll all be back.”

Sean Kennedy, the executive vice president of public affairs for the National Restaurant Association, praised the CARES Act and applauded President Trump for working to keep those businesses afloat.

“We applaud President Trump and bipartisan congressional leaders in crafting a relief bill that gives unique recovery options to the restaurant industry,” Kennedy said. “This measure is an important first step to help restaurants weather the storm, take care of our employees, and prepare for when we are given the signal to open our doors once again. There are challenges that remain before the restaurant industry, and we look forward to working with federal and state leaders to find solutions to support the cornerstone of every community.”

Even chain restaurants have been impacted by the pandemic. This week, Cheesecake Factory Chairman and CEO David Overton told all landlords that the business would not be able to meet rent for all 300 of its restaurant locations.

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