The National Restaurant Association released their latest survey data that shows an alarming number of closures for restaurants with over 100,000 estimated since the pandemic started. This is nearly 1 in 6 of every restaurant in the U.S. who have shuttered completely or indicated they have shut down long-term. Additionally, three million workers are still unemployed for an industry that normally employs around 16 million.
Over 100,000 restaurants have already closed, and 40% of operators said they would be forced out of business in the next six months if there is not additional federal aid.— National Restaurant Association (@WeRRestaurants) September 14, 2020
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The large number of closures is directly related to the $240 billion in lost sales that the restaurant industry is expected to suffer this year. Sean Kennedy, EVP of public affairs, reported, "this survey reminds us that independent owners and small franchisees don't have time on their side. The ongoing disruptions and uncertainty make it impossible for these owners to plan for next week, much less the next year."
Additionally, Yelp released their latest Local Economic Impact Report which shows the hardest hit of all businesses continue to be restaurants and retail. As of August 31st, 61% of the nearly 20k restaurants that are marked closed on Yelp are believed to be permanent. Bars are shown to be in more dire straits with the permanent closure rate increasing 10% since data from July. Overall, 54% of the total 6,451 business closures had shuttered for good.
Yelp data shows that in the last six months, there have been 32,109 total closures. It's important to note that this is restaurants and bars on their network. The National Restaurant Association has higher numbers as they estimate totals from their surveys and extrapolate these numbers nationally.
Looking at per city data, the top three markets for business closures are Los Angeles, New York, and San Francisco. West coast cities could see increased numbers with the devastating fires raging through California and Oregon. Looking at business closures per capita, Honolulu, San Francisco, and Las Vegas are the worst affected cities, all metropolitans that rely heavily on tourism and hospitality.
OpenTable has been tracking booking data for seated diners from online, phone, and walk-in reservations which showed an initial recovery has been leveling off the last few weeks and averaging a 44% decrease compared to year-over-year data.
One measure that the industry has been asking for is the Restaurants Act, meant to stabilize the hospitality industry and its suppliers with $120 billion specifically set aside for bar and restaurant relief. Despite bi-partisan support in Congress, the bill has not made any traction, although, a second stimulus package has also been delayed for weeks. Until legislative support is passed, and a vaccine not anticipated until next year to be widely available, bars and restaurants face an uphill battle heading into the colder season.