I believe the restaurant industry is great. Cindy, my Partner at The Profitable Idea LLC says the restaurant industry is one of the worst. Note, her background is banking, finance, and leadership coaching, mine is marketing, entrepreneurship, and small business coaching. She has seen many restaurants close and banks shy away from making loans to new ones. I have chefs and restauranteurs in my family who have worked at some of the finest and most successful restaurants in the world. We come from two different viewpoints, but we generally meet in the middle: where the numbers are.
The National Restaurant Association says the pandemic killed about 110,000 eateries, or 1 in 6 establishments. Dataessentials, a research company, says more than 10% of all restaurant locations in the US have closed during the pandemic, including all types of restaurants, from fine dining to cafes, from independent restaurants to chains. So much changed during the pandemic. Most people haven’t gone to restaurants to eat and most haven’t commuted to work. Restaurants with high rents, dependence on indoor seating, and those that depended on commuter traffic were hit hardest. Examples: Michelin starred restaurants like Trois Mec in LA, historic spots like The Paris Café in NYC, and dive bars like The Post Pub in DC are closed for good, while chains including Dunkin’, MacDonald’s and Burger King are down by hundreds, and in some cases thousands of locations. The industry lost $120 billion during the pandemic, according to the National Restaurant Association.
Not all of the news was bad, however. Restaurants with drive-throughs did well. Some food trucks did really well, especially if they were serving people outside hospitals, barbershops, and bars. Some trucks report they had too much business. And since vaccines have been deployed at above expected levels across the country, new food businesses are starting to open. Yelp reports that in the first 3 months of 2021, 18,000 new food businesses have opened, which is about the same number as opened in the first quarter of 2020. In the first two months of this year, Americans filed applications for 50,000 new food businesses, nearly double the 10-year average! Mobile food businesses are expanding across the country. Laid off chefs are creating new locations from the vast amount of available real estate, already built out and ready for a new concept, with lower rent since the pandemic began. ‘Ghost kitchens’, or businesses that have delivery only, are also popping up – 700 new ones on yelp in the last quarter of 2020. And the number of food businesses by mail are growing.
One thing we know is that Americans like to eat out, or have someone else do the cooking. As they get back to work, in some cases, back to the office, they will be looking for easy solutions for good food to eat.
Do you have a food concept on your mind? Join us in September for the Profitable Idea Business Coaching Program to learn how to make your business delicious, exciting and profitable!
All the best,
Amanda Weathersby, and Cynthia Flanders are Co-Leaders for the Profitable Idea LLC, which is now online!
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