By Leslie Patton and Kate Krader
When Chicago restaurant owner Manish Mallick does the math, the outlook isn’t pretty: Sales are 10% of what they were, while costs continue to pile up, from credit card fees and city permits to masks and thermometers.
The owner of ROOH Chicago, an Indian restaurant nominated for the city’s 2019 restaurant of the year by foodie publication Eater, gives himself a couple months at most.
It’s going to be tough to survive,” Mallick said. “Ultimately I need people to come and start dining in. And the more time it takes, the worse it gets for us.”
With each week, more data emerges to show how the Covid-19 pandemic is permanently reshaping the restaurant industry. The world is currently on track for a radical overhaul of its food-service landscape: Hundreds have filed for bankruptcy over the last three months, according to consulting firm Aaron Allen & Associates, and the situation is poised to keep worsening
“Based on our estimates, we believe up to 10% of all restaurants globally will disappear, with 20% or more also going through a restructuring process,” said founder Aaron Allen. “This is a conservative case, in our view.”
Allen estimates there are about 22 million restaurants worldwide, so the projection implies that 2.2 million of them will close. In the U.S., the industry employs 15.6 million workers, according to the National Restaurant Association.
OpenTable, which tracks restaurant activity via reservations, estimates the failure rate could be even higher. Even before the global pandemic caused a dramatic and unprecedented shift in consumer behavior, the restaurant industry was suffering from rising debt and too much competition.
So far, the list of bankruptcies includes Le Pain Quotidien and Garden Fresh Restaurants, the owner of Souplantation and Sweet Tomatoes. Larger chains such as TGI Fridays and Cousins Subs won’t reopen a number of shuttered locations, and franchisees of big chains are also increasingly feeling pressure. READ MORE