Roughly 60% Of Restaurant Closures Will Be Permanent, Yelp Report Finds

( The restaurant industry has had an extremely challenging go of it during the coronavirus pandemic.

Many have been forced to shutter their doors completely as a result of state-imposed lockdowns. All have had to adjust to huge changes in operation, such as offering delivery or takeout-only service.

This has put a huge dent in their sales, and many restaurants that have closed during the coronavirus pandemic will remain so for good.

A recent report from Yelp finds there have been 26,160 restaurant closures as of July 10. Of that total, 60% (or 15,770) are permanent closures. In just one month, permanent restaurant closures have increased by 23%, and 2,179 more restaurants have closed because of the pandemic.

As Yelp wrote in its report:

“The restaurant industry now reflects the highest total business closures, recently surpassing retail.”

This data was reported recently as part of Yelp’s Local Economic Impact Report. As Yelp’s vice president of data science, Justin Norman, said”

“Restaurants are known to run on thin margins, which makes a forced closure even more painful for the industry. Unfortunately, we expect these closures to continue. As COVID-19 cases continue to rise across the country, we anticipate states will roll back or delay reopening plans, which will inevitably impact the future success of all businesses, including restaurants, possibly turning even more temporary closures into permanent ones.”

Restaurant industry groups have been calling on the federal government to step in to provide some badly-need relief. On Friday, the Independent Restaurant Coalition tweeted:

“As cities across the country announce more closures, independent restaurants face more uncertainty than ever before. We’re hanging in the balance — and if we don’t get federal relief soon, many of us could close for good.”

Faced with no other choice, restaurant owners have been forced to try to pivot their offerings to stay above water. That includes changes to their menus, offering expanded or new delivery and/or takeout options and other services.

Yelp’s report analyzed situations like this, and found that despite all these changes, many restaurants were still unable to remain in business.

Norman did say, though, that some restaurants have done well with these new services. Yelp has a waitlist platform that helps restaurants manage curbside pickup.

“We’ve already seen a ton of success from restaurants that have expanded their takeout and delivery options. Some are even offering meal kits, drink kits, cooking classes and pivoting their use of technology,” he said.

But many restaurants haven’t been able to pivot in ways that can keep them profitable — or even holding on. A June survey conducted by the National Restaurant Association found the food service industry lost almost $120 billion in sales in the first three months of the coronavirus pandemic.

Numbers like that are crippling to an industry as a whole. Taken individually, they can be a death sentence to restaurants that are already operating on thin margins. The problem becomes even more pronounced in summer beach towns where, for example, they rely on just a few months worth of sales to carry them throughout the rest of the year.