Report: 1 in 3 Restaurants at Risk of Closure

Some dissenting restauranteurs keep their doors open amid new COVID-19 restrictions.

December 01, 2020

ALEXANDRIA, Va.—Some U.S. chefs and industry advocates say new rules to stop the spread of COVID-19 could be the final straw for restaurants, according to Pymnts.com.

The Independent Restaurant Coalition reports that one in six U.S. restaurants already has closed for good due to COVID-19, and that number could grow to one in three by year's end. The National Restaurant Association citied the U.S. Census Bureau data indicating a seasonally adjusted decline in restaurant business in October, the first slippage since the industry began coming back from the damage inflicted by the first wave of shutdowns.

"October’s sales decline is a troubling sign for the industry, as the month likely included some of the last opportunities for outdoor dining in many parts of the country,” the restaurant group wrote. “Factoring in the indoor dining restrictions that are currently being reimposed in some jurisdictions, it becomes clear that the winter months will represent an extremely challenging period for restaurants that rely on on-premises business."

In a Nov. 17 letter to the National Governors Association, Tom Bené, head of the association, said that restaurants are being unfairly blamed for coronavirus cases. 

"We continue to support aggressive steps to protect the nation’s public health,” he wrote. “But there is an unfounded impression that restaurants are part of the problem, and we are suffering as a result of inconsistent, restrictive mandates. Tens of thousands of additional restaurant bankruptcies—and millions of lost jobs—are now more likely, while the science remains inconclusive on whether any health benefits will accrue.”

Meanwhile, some restaurant operators are rejecting a new round of shutdown orders. They insist that serving customers indoors is their only way to stay in business and that they can do so safely, reports the Wall Street Journal.

Mike Coughlin, owner of the Village Traven and Grill in Carol Stream, Illinois, is breaking a state order by serving pot-roast and fish-fry platters indoors, but he said it’s worth the risk if it keeps his eatery open.

Like tens of thousands of restaurant owners, Coughlin closed his dining room early in the pandemic, reopened at limited capacity when rules allowed and increased outdoor patio service during the summer. He invested thousands in seating dividers and purchased a $10,000 air-purification system for his dining room this fall. In November, Illinois suspended indoor dining statewide, and Coughlin faced the loss of holiday business as his financial reserves dwindled. He decided to keep the restaurant open, even if it results in legal consequences or fines.

At a recent press conference, Illinois Gov. J.B. Pritzker (D), pointed to studies connecting coronavirus cases to indoor restaurant dining, including a study by the U.S. Centers for Disease Control and Prevention concluding that adults who tested positive for COVID-19 were twice as likely to have reported eating in a restaurant compared to those who tested negative. Scientists say the new virus is more likely to be transmitted indoors where people are in close contact and are not wearing masks.

Restaurants and trade groups in an increasing number of states, including California, Illinois, Michigan, New York, Oregon and Texas, have sued over dining restrictions in state and federal courts. Restauranteurs in Illinois, Pennsylvania and New York City have held rallies demanding that dining rooms remain open.

Illinois was the first state to ban indoor dining again in November, followed by Michigan, Washington, Minnesota, Kentucky and most of California. New Mexico and Oregon have eliminated table service altogether. In New York City, officials say they may suspend indoor dining if cases continue to rise.

A Stanford University study published earlier this month found restaurants and cafes are “super spreader” sites where many have contracted COVID-19, but the NRA and other industry groups argue that the Stanford study—and an earlier one by the CDC—relied on small samples, lacked contact-tracing data and didn’t take into account whether the restaurants they studied had properly followed safety measures.

As of Nov. 23, Illinois State Police had received 176 complaints regarding businesses and public events out of compliance with COVID-19 restrictions, a spokeswoman said. Special agents issued misdemeanor charges in five incidents as of Nov. 17.

At a recent meeting in Rockford, Illinois, some local leaders told operators of more than 100 bars and restaurants that they didn’t intend to force businesses to close due to noncompliance. “There’s no proof they were ever really the problem,” said Illinois State Sen. Dave Syverson (R).

But the city’s mayor does not agree. “I have tremendous empathy but also have lost quite a lot of patience for the few who don’t feel they have to follow these mitigations,” said Tom McNamara (D).

Coronavirus Resources

NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.

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