Winter is coming, bringing a new challenge to already-struggling restaurants

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New data from the National Restaurant Association outline how hard the industry has been hit by the pandemic, with an estimated $165 billion in sales lost from March through July and more than 8 million workers either furloughed or laid off at the peak of the outbreak.

The industry advocacy group projects that 15% of all eating and drinking places, some 100,000 establishments, are not open for business in any capacity. It remains to be seen how many of these closures become permanent.

"We are at an inflection point in the industry. First, the seasons are changing, we've been limping through high season and are about to go into the low season. We are doing that when the industry continues to be at its weakest point, ever," said Sean Kennedy, the association's executive vice president of Public Affairs.

The group's survey of more than 3,500 members finds that sales are down by about a third, and nearly 40% of operators say their restaurants will likely be out of business in six months if economic conditions remain. As sales declined, 60% of respondents also said they were spending more on operational costs as a percentage of sales.

"The average restaurant has 16 days of cash on hand," Kennedy said. "It is just simple mathematics that something needs to be done." Despite many job losses in the industry at large in recent months, publicly traded restaurant names have been on a hiring spree as consumers opt for digital ordering and contactless experiences.

 

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