The U.S restaurant industry has lost $120 billion of revenues from March to May this year due to the coronavirus, according to a definitive National Restaurant Association survey of 3,800 restaurant operators. Founded a century ago, the National Restaurant Association’s flagship survey is widely considered second only to government statistics. According to the Association’s chief economist, lost revenues for the full year are still expected to exceed $240 billion.
The industry’s lost revenues by month can be roughly broken down as follows:
According to interim data from the U.S. Census Bureau, eating and drinking places generated sales of $38.6 billion on a seasonally-adjusted basis in May. That is roughly $9 billion higher than April, but still roughly $27 billion lower than pre-COVID-19 revenues in January-February 2020. “May sales were more than 40 percent lower than what would have been expected in the absence of the pandemic,” wrote Bruce Grindy, the Association’s chief economist.
In addition to quantitative research, the survey also asked qualitative questions of restaurant operators. Alarmingly, 75% of operators do not expect to achieve profitability within the next six months. “Despite the sales uptick in May, the restaurant industry’s business environment is far from normal, and overall losses continue to mount,” Grindy explained. Bloomberg restaurant analyst Michael Halen does not predict a full recovery for restaurant industry revenues until 2022.
At the height of the pandemic, the U.S. Bureau of Labor Statistics admitted that 8 million restaurant employees were out of work. Restaurants have lost three times the number of jobs than any other major industry. At the worst moment of the crisis, revenues for restaurant groups declined -26%, -55%, -61%, or as much as -89%, depending on their location. In downtown areas like San Francisco and New York City during the middle of March, revenues ceased completely.
Of the 2.5 million total jobs added nationwide in May across all industries, nearly 1.5 million jobs were added at restaurants and bars. Many of these rehires were assisted by funds from the U.S. Small Business Administration’s Paycheck Protection Program (PPP). The PPP Flexibility Act was signed into law this month, lengthening the period for loan forgiveness from eight to 24 weeks, and reducing the payroll expenditure requirement from 75% to 60% of the loan principal.
The coronavirus pandemic continues affecting restaurants disproportionately. Just today, 18,577 new cases have been added, including 500 deaths. Total cases amount to 2,104,346 with 116,140 deaths. A graph of new U.S. COVID-19 cases, per the U.S. Centers for Disease Control and Prevention, appears below with data as of yesterday, which is heavily skewed to the downside due to New York City remaining closed longer than expected.