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- COVID-19 has hit the $2.5 trillion food & beverage industry harder than any other sector of the economy, with restaurants accounting for 60% of the 16.8 million jobs lost between March 19 and April 9. The National Restaurant Association estimates the industry lost more than $50 billion in sales in April as a result of closures.
- Some restaurants with preestablished takeout/delivery service and the ability to mobilize for curbside pickup have been able to cover minimum expenses with ongoing off-premises services. However, this often generates only 10% to 20% of total sales and is insufficient to sustain the business full-time or, in many instances, until reopening.
- There is growing concern about permanent closures due to the loss of sales, mounting debt and the uncertainty of loan issuance and forgiveness under the Paycheck Protection Program. A survey conducted by the James Beard Foundation on April 16 revealed that 28% of small and independent restaurant owners don’t believe they can survive another month of closure. Furthermore, only one out of five are confident they can sustain their businesses until normal operations resume.
- As the U.S. prepares for phased reopening over the coming months and cautious consumers reemerge from lockdown, restaurant operators and their landlords must prepare for operational and economic challenges.
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Richard Barkham, Ph.D.
Global Chief Economist, Head of Global Research & Head of Americas Research
Global Chief Client Officer and Senior Economic Advisor
Senior Research Analyst