Amid coronavirus, most restaurants don't expect to earn profit for 6 months
The industry lost $120 billion in sales between March and May: Study
The coronavirus pandemic is hitting the restaurant industry hard.
Despite many chains turning to creative solutions like curbside pickup or drive-through only, three of four restaurant operators don't expect to turn a profit in next 6 months, according to data from the National Restaurant Association, the main trade group in the industry.
Restaurants lost a striking $120 billion in sales between March and May, the research noted, forecasting the industry could lose another $240 billion in sales by the end of the year.
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"State-mandated stay-at-home policies and forced closures of restaurant dining rooms resulted in losses of $30 billion in March, $50 billion in April, and another $40 billion in May," the group, which polled more than 3,800 restaurant operators from May 15 through May 25, said.
Even as states begin to reopen dine-in eating, 66 percent of respondents with restaurants open for takeout and delivery said it is still “too soon” to reopen safely. More than a third of those respondents, or 34 percent, said there aren’t enough customers to justify reopening.
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Sales are recovering at big chains like Outback Steakhouse, but are still down 24 percent over last year. Same-store sales 24.7 percent for the week ending June 6, compared with a 32.8 percent drop for the week ending May 10.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BLMN | BLOOMIN' BRANDS INC. | 12.79 | +0.20 | +1.59% |
The industry as a whole is also facing supply chain issues as a result of the outbreak. The costs of steaks, ribs and pork roasts are up 10 percent and whole chicken is up 7 percent, the Consumer Price Index recently reported.
In the National Restaurant Association’s past two surveys, the researchers noted that about 3 percent of all restaurants have closed permanently, stating the final figure will be “in the tens of thousands.”