The long-predicted pandemic-fueled dark days of winter are upon us, and as COVID-19 cases spike around the country and the death toll continues to rise, the economic situation gets worse and worse. Some 140,000 nonfarm payroll jobs were lost in December, according to the U.S. Bureau of Labor Statistics in its early January Employment Situation Summary.
The loss was much higher in the food and drink service sector, where unemployment rose from 13.8% in November to 16.1% last month. That accounts for some 372,000 fewer jobs in the industry in December alone (increased employment in construction and other areas offset food and drink losses). Most of these jobs are being lost largely as a result of economic hardships associated with restaurant reopening restrictions in every state.
While the situation changes almost daily, at least five states plus New York City and the District of Columbia currently ban all indoor dining, and other states and municipalities impose strict capacity limits. These restrictions have devastated restaurants, especially establishments without adequate outdoor seating space or the ability to pivot successfully to a takeout and delivery model.
There’s some good news: The Consolidated Appropriations Act, 2021, signed into law by President Donald Trump on Dec. 27, contains a number of provisions that will benefit the restaurant business. Among other things, qualified businesses that received an earlier PPP loan are eligible for a new one and business meals are now 100% tax-deductible, which should encourage increased diner spending.
But the measure comes too late for some restaurants, which had been barely managing to hang on. Throughout the fall and early winter, establishments both old and new, both plain and fancy, have regretfully announced that they just can’t continue operating.
The casualties include such popular family-oriented chains as Friendly’s on the East Coast and Luby’s across Texas; Michelin-starred restaurants like Dialogue and Trois Mec in Los Angeles; and veteran institutions like 97-year-old Sokolowski’s University Inn in Cleveland and the centenarian Pacific Dining Car in Los Angeles.
Despite financial aid and the optimism engendered by the rollout of coronavirus vaccines, the crisis is far from over for the hospitality trade and more restaurant closures are sure to come. These are the saddest restaurant closings of 2020.
Since last May, 24/7 Tempo has tracked permanent restaurant closures due to COVID-19 around America, with frequent updates. This latest report covers popular establishments in 24 states and the nation’s capital.