KANSAS CITY — Much of what was predicted this past spring with the onset and spread of the novel coronavirus (COVID-19) throughout the United States has come to pass. The economic and social disruptions have been significant. Now, with cases rapidly rising, many of the same public health experts are issuing warnings about a resurgence of the virus as the weather transitions from summer to winter. Foodservice operators adapted this summer, many successfully, but as the weather limits outdoor dining in many parts of the country the impact may be devastating.
Data released by the National Restaurant Association in mid-September show the restaurant industry to be “in limbo.” Nearly 1 in 7 restaurants, representing nearly 100,000 establishments, have closed permanently or long term. The association is forecasting the industry is on pace to lose $240 billion in sales by the end of the year.
How operators adapted by moving outdoors and embracing off-premises applications this summer may be seen in sales data from the NRA. Industry sales trended higher in September, a continuation of a trend that began earlier in the summer, but at the slowest pace since the economy began to reopen from lockdowns. Industry sales were $55.6 billion on a seasonally adjusted basis, according to data from the US Census Bureau. September sales were up 2.1%, or $1.1 billion, from August.
A more troubling picture emerges when looking at industry employment. Employment at restaurants at the end of September was still down 2.3 million jobs from February’s peak, leading the NRA to say the restaurant industry’s return to pre-coronavirus employment levels “will likely be measured in years and not months.”
Epidemiologists have been predicting for months a surge in COVID-19 cases this winter as colder weather throughout the country forces more people indoors and makes social distancing more difficult. The situation will be especially difficult for restaurant operators in the coldest parts of the country who will lose outdoor dining opportunities because of the weather and who must run their indoor operations at a reduced capacity to protect customers and staff.
Necessity is the mother of invention, and operators have done a remarkable job embracing new concepts and technologies to survive during the pandemic. Business models incorporating pick-up, delivery, ghost kitchens and more have helped many operators remain in business. But such initiatives will only aid a fraction of the foodservice operators impacted by the pandemic.
The restaurant industry market researcher Technomic, Inc. echoed the NRA’s forecast, saying the industry will lose between $250 billion to $300 billion in sales during 2020 compared to 2019. Segments under the greatest pressure include full-service restaurants, bars, business and industry, travel and leisure and education.
The foodservice industry’s prospects going forward are tied directly to medical advances such as a vaccine or advanced therapies as well as an underlying economic recovery, according to Technomic. It will be a long winter for the industry. If federal support is not approved, the situation will be made even worse. The restaurant sector, which as recently as 2019 accounted for 50% of consumer spending on food, may look very different as winter transitions to spring in 2021.