The National Restaurant Association (NRA) recently conducted a survey of over 4,000 restaurant operators in an effort to measure the devastation being caused across the restaurant industry due to Coronavirus. The results are as bad as you can imagine.
The survey found 3% of American restaurants have already permanently closed. Another 11% of survey respondents indicated their restaurant would be closing for good within the next 30 days.
Of the restaurants that will not be closing forever, 70% have laid off at least some of its workers. These lay-offs represent a significant number of the record 10 million unemployment claims reported during the last half of March. The NRA has estimated restaurant revenue loss at $25 billion and job less at 3 million jobs in the month of March alone.
Help on the Way?
Now would be the time to report that despite the devastation, we should expect a rebound soon. Unfortunately, the closures and layoffs seen thus far are most likely just the tip of the iceberg.
President Trump just signed a $2 trillion coronavirus relief bill that does include quite a few provisions for small businesses and restaurants. Most notably $350 billion in forgivable loans for distressed businesses. Restaurants can use this money to pay employees, and have the principal portion of the loan forgiven.
However, these loans may not be enough to keep them going. Many surviving restaurants are temporarily closed or severely handicapped by limited operations.
Companies like the Cheesecake Factory have already stated publicly that they will not be paying rent to their landlords in April. Craftworks Holdings, parent company of Logan’s Roadhouse, has already entered Chapter 11 bankruptcy.
If large successful chains with deep pockets are collapsing this quickly under the weight of the coronavirus shutdown, a wave of small restaurant closings will surely follow.
If you are a restaurant owner or operator, we encourage you to keep your head up. Take advantage of as many programs as you can to keep your operations going. Check out this SBA page, it has a number of options for you.
If you are a lover of restaurants, PLEASE SUPPORT THEM! Get takeout this week. Then get it again. They are counting on your support. Don’t let your favorite restaurant be among the 14% we are losing forever.