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10,000 American restaurants have shut shop in the past three months alone

Small business owners are the most at risk, particularly as Congress stalls relief measures and states impose tighter lockdown measures.

10,000 American restaurants have shut shop in the past three months alone
Image Source: Coronavirus Pandemic Causes Climate Of Anxiety And Changing Routines In America. NEW YORK, NY - MARCH, 17. (Photo by Victor J. Blue/Getty Images)

Across the world, the pandemic forced restaurants and bars to shut their shops due to government-mandated lockdown measures. Unfortunately, this has led to many restaurants shutting down shop permanently. According to a new report, about 17 percent of all restaurants in the United States have permanently closed owing to the public health crisis. The food and beverage industry is only expected to be in further danger as we enter the first quarter of 2021. The National Restaurant Association is thus publicly pleading with Congress to pass a new stimulus bill that will help the industry overcome the damage caused by the pandemic, CNN reports.


The group on Monday said that 110,000 restaurants have already permanently shuttered in 2020, with 10,000 of them closing up shop in the past three months alone. These numbers are from a survey they conducted with 6,000 restaurant operators. The survey revealed that 87 percent of full-service restaurants reported an average 36 percent drop in revenue. In addition to this, 83 of restaurant operators expect sales to be "even worse" over the next three months as the virus, lockdowns, and associated economic fallouts continue to lash the United States. Small mom and pop businesses are likely to be the worst-hit.


37 percent of respondents claimed it would be "unlikely" that they will be open in six months from now, particularly if they did not receive further financial help from the government. Sean Kennedy, executive vice president for the National Restaurant Association stated, "In short, the restaurant industry simply cannot wait for relief any longer." He is thus advocating for a "true compromise" between the competing Democrat and Republican proposals. It is his hope that the incoming administration under President-elect Joe Biden's leadership will pass a larger stimulus package in 2021 that will protect the restaurant industry.


This week, a bipartisan stimulus proposal that includes an extension of the Paycheck Protection Program, could be unveiled. This is backed by a group that includes Democratic Senator Mark Warner of Virginia. Disagreements over other issues, however, mean it is unclear if a deal will be reached. Another measure, the Restaurants Act of 2020, was passed by the Democratic-controlled House in October as part of a $2.2 trillion stimulus relief package. This is also yet to be taken up by the Republican-controlled Senate. Strict lockdown and social distancing measures, coupled with a lack of government relief, have only worsened outcomes for American restaurants.


For instance, several national chains filed for bankruptcy this year, including Ruby Tuesday's and California Pizza Kitchen. This has resulted in the closure of dozens of locations across the United States. As tight regulations on indoor dining capacity in some US states and other lockdown stipulations hurt smaller businesses more, a Los Angeles-based restaurant owner said. She felt restaurants and other small businesses are unfairly targeted under California's new and stricter stay-at-home order. According to CNN Business' dashboard tracking America's recovery has shown a steep decline in restaurant reservations, down 70 percent during the pandemic.


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