The Impact of the COVID-19 Pandemic on the Restaurant Industry

In The Rock Star’s Wife series, nearly all of Cassandra’s family depends on the family’s restaurant, Costas’ Place, for its support.  When the COVID-19 pandemic hit, however, the restaurant, like others nationwide, was forced to temporarily close.  What damage does an event like this cause?  What was the true impact of the COVID-19 pandemic and the restaurant industry?

In first 22 days of March 2020, the restaurant industry lost $25 billion in sales and more than 3 million jobs.

By May 5, 22 percent of restaurants permanently closed, and 29 percent of the remaining restaurants had laid off more than 75 percent of its staff.  An additional 63 percent had laid off some of their employees.

By June 5, 43 states were allowing, or would soon allow, restaurants to reopen for dine-in service. State implemented strictly reopening guidelines.  These included hygienic requirements for employees, dining room capacities between 25 to 50 percent, and social distancing.

Once restaurants reopened, they faced the challenge of proving they were a safe environment to be in.  As many as 80 percent of people did not go to a sit-down restaurant after restaurants reopened.

Rebounded in 2021?

In September 2021, the National Restaurant Association Research Group conducted a survey.  The results showed that although restaurants’ business was drastically improved from the year before, it hadn’t improved for everyone.  Only 56 percent of restaurants’ sales volume in August 2021 was higher than the year prior.  When compared to 2019, only 24 percent of restaurants had higher sales.

Even as late as August 2021, 49 percent of limited-service operators and 40 percent of full-service operators were not open at full capacity for indoor dining. The overwhelming reason was a lack of adequate staffing.

In addition, restaurants were experiencing supply delays or shortages while the cost of doing business had increased.  Food, labor and occupancy costs were all higher than they were prior to COVID-19.  For 85 percent of operators, profit margins were lower than pre-pandemic levels.

Most restaurant operators didn’t expect the situation to improve anytime soon.

Long-term Changes to the Restaurant Industry

Now, nearly four years after the March 2020 shutdowns, long-term changes have emerged.

Restaurants are closing or minimizing dining rooms.  Some establishments have transitioned to being quick-service restaurants.

“The restaurant industry has been bifurcated between two types of places: ones that cater to the ‘hangry,’ must-eat-now crowd and those who want to be nurtured and entertained,” The Washington Post said.

The first group makes use of drive-throughs.  Drive-through business increased 13 percent, and 39 percent drive-through lane traffic is bumper to bumper.

Meanwhile, carryout orders decreased 3 percent and delivery increased five percent.  Delivery comes with a downside. Delivery providers’ high fees eat into profits.

Since the pandemic, more restaurants are offering online ordering.  This option costs restaurants $30,000 to $50,000 to develop a basic on-demand food delivery app, something that’s cost prohibitive for many independent restaurants.

One final trend that appears to be here to stay:  scaled back menus offerings.

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Were you aware of the impact of the COVID-19 pandemic on the restaurant industry?  Leave a comment below.  Comments close after 90 days.

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Here’s the 4-1-1

This blog is a companion piece to The Rock Star’s Wife, a series about sex, family, and rock & roll.  The series has elements of chick lit, romance and erotica and is best compared to The Vagina Monologues for its frank talk of sex and its consequences.  The series follows Cassandra from her teenage years into her 40s as she navigates relationships (both romantic and platonic) — all with music playing a prominent roll.

Book seven, The Pandemic Diaries, debuts February 2026:  Cassandra finally has Nat home full time like a normal spouse.  Unfortunately, it’s because the COVID-19 pandemic has forced the cancellations of concerts and put the music industry on hold.  Meanwhile, she discovers that when people are hoarding toilet paper, they aren’t buying erotica books.  How will the family survive the shutdown?  And more importantly, how will they survive each other?

Cassandra needs your help getting her story out.  Join the street team to help.