Restaurant owners globally are assessing retail carnage in the wake of the coronavirus pandemic that will likely claim 2.2 million restaurants in 2020.
In the US, the National Restaurant Association estimates a shortfall of $120 billion in restaurant and foodservice sales from March through May.
Bloomberg News reports that the pandemic is permanently reshaping the restaurant industry. Consulting firm Aaron Allen & Associates estimates 10% of restaurants globally will disappear, with an additional 20% forced to go through a financial restructuring. The report quoted an even more pessimistic OpenTable, which notes that the US restaurant industry, which employs 15.6 million workers, was already suffering from rising debt and excessive competition “before the global pandemic caused a dramatic and unprecedented shift in consumer behavior.”
Delivery and curbside service are now common, but currently bring in only 35-40% of prior sales, forcing chains including Panera Bread and Tijuana Flats to offer groceries for the foreseeable future. Estimates place grocery orders at 10-25% of total sales.
OpenTable c.e.o. Steve Hafner predicts 25% of US restaurants might close permanently. “Even in the best of times, restaurants operate on really thin margins. So if you add on capacity restrictions and new safety and service protocols, it’s really tough for a restaurant to make it,” he told Yahoo! Finance. On May 14, total reservations and walk-ins on OpenTable were 95% below reservations on the same date during the previous year. Nationally, year-over-year restaurant sales are now about 65% of sales during the same period in 2019. OpenTable tracks 60,000 restaurants globally.
Yelp! which lists 140,000 businesses large and small, reports 41% of its listings have shut down for good. Los Angeles experienced the largest number of closures at 11,774 but Las Vegas was much harder hit per capita with 1,921 closures, according to Yelp, which counted 23,981 restaurant closures along with 27,663 retail shops. Approximately 20% of the businesses that were closed in April have reopened.
There are about 22 million restaurants worldwide. The greatest concentrations are in cities like New York, where there are 27,000 restaurants, of which 4,800 are now open for outdoor dining.