Here’s How Much Money the Restaurant Industry Has Lost Due to COVID-19
Even big-name restaurants are being forced to close many locations. Could your favorite be in jeopardy?
The economy as a whole has been devastated by COVID-19, but one of the most omnipresent aspects of daily life that’s been completely transformed is restaurant dining. While many restaurants reopened sometime in May, many did so with limited capacity and outdoor-only dining, facing a new set of challenges. And in many places throughout the United States, restaurants are among the reopened places that have closed again. They’ve been hit hard already and they’re certainly not out of the woods yet.
How much has been lost?
American Customer Satisfaction Index’s 2019–2020 report, released at the end of June, directly addressed the effects of COVID-19 on the restaurant industry. The data is constantly changing and takes a while to process, but the ACSI reports that, per the National Restaurant Association, the restaurant industry lost a total of $120 billion between March and May alone. They also claimed that looking at current trends, that number could double by the end of the year, resulting in losses of $240 billion. (And of course, this is just America.) Find out how much money Disney has lost because of the pandemic, too.
Which major restaurants have been hit hardest?
Of course, the pandemic has been devastating for independently owned restaurants, and we’ve covered plenty of ways you can support your favorite small businesses. But many major chains have been slammed as well, and the ACSI report goes into detail about which big-name eateries have shuttered the most locations.
In the world of full-service dining, TGI Fridays was harmed substantially by COVID-19 closures. ACSI reports that they had no program in place for curbside pickup, leaving them at a serious disadvantage compared to their competitors. They also struggled to handle the high volume of customer calls at the start of the pandemic, eventually turning their headquarters into a call center. The damage? “Fridays is projecting that up to 20 percent of its locations may close permanently,” the report says—and that was at the end of June before the virus resurgences reached their peak. Another full-service restaurant that may be facing a dark future is Ruby Tuesday, which had already closed 26 restaurants in 2019 and is anticipating more permanent closures in 2020.
For limited-service dining—which does seem, overall, to be better equipped for the continued pandemic than full-service—Subway provides an interesting case. In fact, it’s the fast-food chain closing more restaurants than any other. It came into 2020 after a whopping 1,000 closures in 2019, but its mobile app, which is very well-received by customers, is keeping it afloat pretty well. Pizza Hut is another interesting case—it was already in the process of transitioning entirely to delivery and carryout, and the pandemic has sped that along. The ACSI predicts that it could close 500 stores in the next two years, but its intention was to shutter in-person locations anyway.
The bottom line is that restaurants big and small are trying their best to pull through tumultuous times. This means that, while you absolutely must take safety precautions, keep going to restaurants—they want and need your business. And, if you can, be generous with your tips. Next, find out what restaurant servers wish you knew about outdoor dining.