One-Third of Restaurants Aren't Sure They'll Survive

Today, in collaboration with the Independent Restaurant Coalition (IRC), we're releasing a new batch of survey data on the state of the country's independent restaurants and bars, painting a dark picture of the industry as the pandemic enters its sixth month.

According to data collected from our two surveys in mid-May and July, the restaurant industry is at risk from a multitude of forces, including inconsistent information about COVID-19 health and safety protocols and a lack of meaningful financial support. With fears around customer behavior and the costs of re-opening, combined with forced re-closures as the pandemic continues, owner confidence is waning. Below are some of the topline findings from our most recent surveys:

Restaurants are not confident about surviving through October.

In July, owners expressed just 66% confidence they would still be open through October. In May, despite 92% of respondents having received PPP loans, business owners expressed only 60% confidence they could survive the crisis.

Closing and re-opening will stretch finances.

Another primary concern for owners is the potential to have repeatedly closed their restaurants if a customer or staff member tests positive for COVID-19. More than 55% of July respondents chose the financial pressures of closing and re-opening as a reason they may have to close their restaurant permanently. This was a 20% increase from the May 2020 survey when only 34.7% of respondents chose it as a top concern.

Independent restaurants and bars are taking on extraordinary levels of new debt.

Nearly 75% of independent restaurants reported taking on new debt obligations over $50,000 in May.

Seating capacity needs surpass many state restrictions.

In July, owners reported needing nearly 60% capacity, at a minimum, to make re-opening work for them financially. This follows a similar result from May’s survey, indicating that the 50% and 25% capacity limits imposed by several states and localities does not work for independent bars and restaurants.

Restaurants are concerned about the return of customers.

Thirty-nine percent of respondents indicated consumer fears about COVID-19 transmission among their top three concerns about re-opening.

Owners cite unpredictability as a top concern for re-opening.

Nearly 36% of respondents rank unpredictable state guidelines for operating among their top three concerns regarding re-opening.

Restaurants are struggling to cover basic costs.

In May, 69% of restaurants named rent and payroll as their biggest, most immediate cash challenge. In July, 52% of respondents indicated relief for new PPE expenses, rent, mortgage, payroll, staff benefits, and vendor expenses as their top priority.

Restaurants overwhelmingly cite health and safety of staff and customers as a top priority.

Looking ahead at re-opening, restaurants cited the health and safety of employees and customers as their top concern in July. At the same time, customer behavior was a growing concern: 27% of respondents listed it among their top three worries for re-opening. Owners cited customers not wearing masks (82%), not social distancing in common areas (71%), potential conflict over safety with customers (71%), and staff mistreatment (65%) as top concerns around customer behavior.

About the Surveys
Since March 13, 2020 the James Beard Foundation has fielded surveys around COVID-19 using Survey Monkey. This report covers two surveys—the first open May 19 to 29, 2020, and the second from July 14 to 28, 2020. The total number of respondents for the two surveys was 2,184. Respondents were 48% male and 47% women; 25% of respondents identified as non-White. Eighty-five percent of respondents are owners and/or operators.

Read the full press release.

Learn more about the RESTAURANTS Act and IRC's efforts to support independent restaurants.