Restaurant closings can double within next 3 months, investment company CEO warns
It's a 'bleak, bleak situation' for independent restaurants, said Charter Holdings CEO Ray Washburne
Charter Holdings CEO Ray Washburne argues the restaurant industry is on track for more permanent closures without more PPP money.
The number of restaurants closing permanently could double in the next 60 to 90 days due to the coronavirus pandemic lockdowns, Ray Washburne, Charter Holdings CEO, said Thursday.
Washburne, whose company has investments in real estate and restaurants, told "Mornings with Maria" that he predicts more closures after the Payroll Protection Plan money ran out at the end of July, calling it a "bleak, bleak situation" for independent restaurants.
Yelp reports 15,770 restaurants have permanently closed as of July 22.
A pedestrian wearing a face mask walks past Beachwood BBQ restaurant, open for 14 years in Seal Beach, California, on July 28, 2020. The restaurant permanently shut down due to the coronavirus pandemic. (Photo by FREDERIC J. BROWN/AFP via Getty Image …
"If you haven't got your sales up to at least break even, I don't know how you're going to get there because with the weather changing, additional regulations coming in, it's very difficult," he explained, adding that protein prices have skyrocketed.
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"In addition, the big brands, kind of a Wall Street-versus-Main Street scenario right now, they're able to spend the money on things like IT and delivery services and things like that and collect that margin," he said, but "independent restauranteurs are not able to."
Reacting to real estate, he said it's a whole new dynamic with delivery and pickup, citing how Brinker International, owner of Chili's, created a new online-only chicken wings delivery under the name "It's Just Wings," making $150 million with no capital cost.
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"We are excited to go into the fall because we think there's a lot of pent up people who want to get out, but we've got to get them into our restaurants to serve them."