How the COVID-19 is Affecting the Restaurant Industry
With many businesses closed down due to the covid-19 outbreak, the restaurant industry seems to be one of the sectors that are experiencing the hardest hit. More layoffs of workers, loss of income, this has left business owners to be grappling for the new reality, survival and overwhelming uncertainties. From forced close-downs to decline in dining out, Pissed consumer complaints, a review consumer review platform carries out a restaurant industry analysis to show how the industry is being affected with the pandemic. Let’s dig in.
A quick look into the restaurant industry profile
Fast-food workers rank among the top 5 most popular jobs in America. The restaurant industry is the second-largest employer in the US economy, which means it employs nearly 10 percent of the US employment and 5 percent contribution to the GDP. However, the novel coronavirus is wreaking havoc in the United States restaurant industry. Related industries such as bars, food production, wine, farming are also not left out. The New York Times predicted that two-thirds of the restaurants are likely to go out of the market while top industry associations said many will require the support of the government before they can bounce back on their feet again. This article covers the effect of COVID-19 on the restaurant industry 2020.
Closures of restaurants and bars
An industry that has been projected $899 billion in sales in 2020 experienced a staggering 100 percent decline in seated diners worldwide on April 7, 2020. This is due to the measures taken by the government to combat the spread of the virus such as social distancing, avoiding crowded areas and even a total lockdown in some areas. At the outset of the outbreak, Fewer and fewer people have been dining out and there has been a significant drop in customers. Unsurprisingly, with stricter measures put in place and more people have to stay at home, most restaurants and bars have to undergo compulsive closures. Full-service food reservations are being canceled, and walk-ins have dropped drastically across the globe.
Home deliveries taking over
After restaurants have been forced to closed down, many have opted for food deliveries to embarking on outreach programs to assure their customers of the safety of ordering food while at the comfort of their homes. Moreover, some restaurant owners said they have been receiving several orders from hospitals by frontline warriors( doctors, and nurses), who are fighting hard against the outbreak. As most of the hospitals’ cafeteria is closing on time, it has been difficult for some of the hospital staff to get food or drink during their shift. This, however, has proven to be a great one for some restaurants as they deliver food to homes and hospitals.
Grocery buying over dining out
Recently, grocery stores hit their highest daily revenue for 2020 with an 87.4 percent increase in consumer spending from a year earlier. While the restaurant is experiencing a decline, this period has proven to be the peak time for groceries. With the stay at home order, many have stopped going to restaurants and preferred to cook at home. Moreover, the delivery apps landscape is also changing and surging as fear of contagion is driving more customers to place orders for groceries during the covid-19 pandemic. Consumers are panic buying toilet papers, groceries, and other essentials. Therefore, thousand are digging the in-house experience to download apps and place orders for groceries.
Many workers lose their source of income
According to the US labor department, restaurants and bars employees make up for 60percent of jobs lost with staggering 701,000 people rendered jobless overnight in March. Business owners have lost a significant amount of money and many are finding it hard to keep their workers on the payroll. Even the most generous benefit are unlikely to meet up with the worker’s demand completely and many have been forced to enforce workers’ layoffs. Cooks, bartenders, servers, and dishwashers including managers and supervisors are in fears, doubts, and uncertainties about what the future will hold in the coming months. Restaurants and bars workers seem to be the major victim of this crisis.
What does the crisis hold for fast food?
However, while restaurants have declined by 82 percent according to a recent student, groceries, fast food, fruits and veggies, pizza, are fairing the best during this time. According to Yelp restaurant industry analysis 2020, there have been 160%, 102%, 64%, 44% respectively, an increase in consumer interest in the US. Casual restaurants drop sharply as the virus continues to sweep around the globe but the pizza and fast food begin to level up and increase. This might partly be because consumers are tired of eating grocery food and they need a change, plus, pizza is quite affordable. This shows that some businesses in the industry can still weather the storm than others as more people ditch the fine dining halls and restaurants to quick service.
With these analyses, it seems the restaurant industry is headed for a recession. A huge one!
