- Roughly 110,000 restaurants are expected to close permanently in the next month, with more than 30,000 already shuttered, according to the National Restaurant Association.
- Orders at full-service restaurants dropped by 71% for the week ending March 22.
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The coronavirus outbreak is already devastating the restaurant industry.
Roger Lipton, a restaurant industry analyst, investor, and advisor who recently penned a blog post about the upcoming "restaurant apocalypse," told Business Insider that the restaurant industry is facing an unexpected and unprecedented challenge.
"Any pundit who thinks that they're going to use a recent history and by recent history, I mean the last 100 years, including the Depression as a template for what is going to go on here? They're kidding themselves," Lipton told Business Insider on Monday.
The data backs up Lipton's prediction of a "rough, rough road" for restaurants. Here are eight facts and figures that reveal the devastating impact of the coronavirus pandemic on the restaurant industry in the US.
Roughly 110,000 restaurants are expected to close for good in the next month.
11% of the more than 4,000 restaurant owners and operators surveyed by the National Restaurant Association (NRA) last week said that they anticipate they will permanently close within the next 30 days. With more than a million restaurants in the US, that would mean more than 110,000 closing for good.
An estimated 30,000 restaurants have already shuttered permanently.
According to the same NRA survey, 3% said that they had already permanently closed their doors.
Restaurants have lost an estimated $25 billion in sales.
REUTERS/Mike Segar/File Photo
The NRA estimated that the industry lost $25 billion in sales in the first 22 days of March.
Three million people have already lost their jobs.
Maddie Meyer/Getty Images
The same NRA survey found that three million jobs had already been lost, with some major chains already laying off workers.
The Cheesecake Factory furloughed 41,000 hourly workers. Ruth's Chris furloughed the majority of its employees who worked in restaurants, including managers at the chain's 23 locations where carry-out and delivery was not viable. Chuy's closed nine of its 101 locations, as well as placing roughly 40% of its corporate and administrative staff on furlough.
Punch Bowl Social has laid off more than 1,000 employees as it closes locations around the US, according to states' WARN notices. A representative for the trendy arcade chain said that the closures would be temporary.
Orders at full-service restaurants dropped by 71% in the week ending March 22.
AP Photo/Rich Pedroncelli
Total restaurant transactions were down 36% in the week ending March 22, compared to the same week last year, according to The NPD Group. At full-service restaurants which are less equipped for drive-thru and delivery orders transactions fell a whopping 71%.
Fine dining sales have dropped by more than 90%.
Rob Kim/Getty Images for Starwood Preferred Guest
In a report last week, Cowen analystAndrew Charles forecast "a steady, double-digit decline in same-store sales that began on March 16th and persists through the end of July."
Cowen cited a call with Jordan Thaeler, founder of foot traffic tracking company WhatsBusy, who said that fine dining sales had dropped by more than 90%. Casual dining was down 75%, fast casual dropped 65%, and quick service or fast food dropped by roughly 50%.
Two-thirds of people say they're ditching casual dining chains.
Hollis Johnson/Business Insider
In a Gordon Haskett survey of more than 300 households across the US, 67% of people said they decreased their casual dining chain visits in the week that ended on March 27. 62% said they decreased their visits during the week that ended March 20, and 35% said their visits dropped in the week ending March 13.
Half of restaurants can't survive more than 16 days if they stop bringing in money.
A JPMorgan Chase Institute analysis of 597,000 small businesses from February to October 2015 found that half of the companies held a cash buffer large enough to support 27 days of business. Half do not.
Cash buffer days are the number of days that a business can continue paying its typical outflows such as payroll, purchasing supplies, or repaying loans without bringing in any money, in the form of things like revenue, tax rebates, or transfers from investors' or owners' private savings.
JPMorgan Chase Institute calculated cash buffer days by computing the ratio of how much money a business had at the end of the day on average to its average daily outflows. Most companies ran out of buffer days within a month.
On median, restaurants only have 16 buffer days, in part because of how labor-intensive they are to operate. As restaurants struggle to bring in customers, this lack of a buffer is quickly becoming a massive problem.
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