- Close to 20% of restaurants across the US could permanently close because of the coronavirus pandemic, according to a Wednesday UBS note.
- If one in five of the more than 1 million restaurants closes, it would result in 200,000 locations permanently shuttering.
- The National Restaurant Association found that 3% of restaurants in the US have already permanently closed and 11% expect to do so in the next 30 days.
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UBS predicts that up to one in five restaurants in the US could close permanently because of the coronavirus pandemic.
On Wednesday, UBS analyst Dennis Geiger referenced the National Restaurant Association saying that about 3% of restaurants in the US have already closed permanently.
That would mean 30,000 restaurants have already shuttered, based on the NRA’s estimate of more than 1 million restaurants in the US. According to Geiger, the carnage is far from over.
“Closer to 20% is possible considering the health and overleverage of independent owners and select franchisees across casual dining in particular,” Geiger wrote in Wednesday’s note.
If one in five American restaurants closes, it would result in about 200,000 locations permanently shuttering. The industry employs 15.6 million people in the US, according to the NRA.
The NRA surveyed more than 4,000 restaurant owners and operators last week. About 11% said that they anticipate they would permanently close within the next 30 days.
A JPMorgan Chase Institute analysis of 597,000 small businesses from February to October 2015 found that half of restaurants had a cash buffer large enough to support more than 16 days of business. The other half would go out of business before 16 days were over if they were not bringing in money.
Roger Lipton, a restaurant industry analyst, investor, and adviser who recently wrote a blog post about the upcoming “restaurant apocalypse,” told Business Insider that the restaurant industry was facing an unexpected and unprecedented challenge.
“Any pundit who thinks that they’re going to use a recent history – and by recent history, I mean the last 100 years, including the Depression – as a template for what is going to go on here? They’re kidding themselves,” Lipton told Business Insider on Monday.
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