Continuing to wrap my head around the key economic story lines. Restaurant and bar employment is about 12.3 million, but as the virus spreads even further people aren’t going out to eat any more.
Data from Open Table shows that restaurant visits are down up to 50% in major cities such as Seattle, New York, and Boston.
This is big trouble for restaurants, who will close en masse if this keeps up. In Seattle, where the outbreak has hit the hardest, already 50 restaurants have closed.
To add to this, many states and cities are starting to show down or restrict the operation of restaurants and bars for the near term:
- Boston has banned dining in at restaurants.
- Chicago: Bars and Restaurants closed to dine in customers through March 30. Open for delivery and takeout.
- NYC: Bars and restaurants closed to dining in.
- NJ: Closed to dining in.
- California: Gov calls for closure of bars, occupancy of restaurants to fall by half
- DC: Restaurants and bar occupancy to be halved.
- Rhode Island closed to dine-in customers through March 30.
- NJ: No on site dining
- Ohio: Bars and restaurants shut down
- Pennsylvania: no dine in at bars and restaurants
While some establishments can transition to take-out and delivery only, it is unclear the revenue drop from this switch and many will be forced to close.
In New York City it seems many are closing down and laying off staff.
In the short term it seems that many places will go out of business due to the fact they still have to pay leases, interest and debt, and sales tax. Quick relief for restaurant owners could come if the sales tax payment is deferred. Other potential relief for restaurant owners could come if lease payments are deferred.
- Bloomberg: plan to support restaurant workers
- The Atlantic: Restaurants will need a miracle. Notes that restaurant employment is about as large as manufacturing employment!
Updated data from Paul Goldsmith-Pinkham. Looks like total reservations down 50-75%
New from FT: Many restaurants closing