1 in 6 Restaurants Have Closed Permanently or Long-Term Due to Pandemic

A new survey released by the National Restaurant Association,  shows nearly one in six restaurants – representing nearly 100,000 restaurants – is closed either permanently or long-term, six months after shutdowns began. The closures leave nearly 3 million people still out of work, with the industry on track to lose $240 billion in sales by the end of the year.

The survey, which asked restaurant operators about the six-month impact of the pandemic on their businesses, found that overwhelmingly, most restaurants are still struggling to survive and don’t expect their position to improve over the next six months.

The findings show consumer spending in restaurants remains well below normal levels in August, with overall sales down 34% on average, and estimates that for 2020, at least 100,000 restaurants will close. At least 60% of operators say their restaurant’s total operational costs are higher than they were prior to the COVID-19 outbreak, with staffing levels only 71% of what they would typically be without the pandemic.

“For an industry built on service and hospitality, the last six months have challenged the core understanding of our business,” said Tom Bené, president and CEO of the National Restaurant Association. “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.”

The survey also found that 40% of operators think it is unlikely their restaurant will still be in business six months from now if there are no additional relief packages from the federal government.

“This survey reminds us that independent owners and small franchisees don’t have time on their side,” said Sean Kennedy, executive vice president of public affairs for the association. “The ongoing disruptions and uncertainty make it impossible for these owners to plan for next week, much less next year. Congress is about to leave Washington for the elections – we need them to focus on the short-term, basic solutions that have secured bipartisan support and passed one or both chambers. We urge immediate passage of these while we work with lawmakers on the comprehensive elements of our ‘Blueprint for Restaurant Revival.'”

Learn more about the association’s recovery proposals in the Blueprint for Restaurant Revival.