Insights from the US on re-opening restaurants - Crowe Ireland

Insights from the US on re-opening restaurants

Statistics from the American restaurant sector

Insights from the US on re-opening restaurants - Crowe Ireland
Research from the US restaurant sector highlights some interesting trends for the number of jobs lost, regained and pace of recovery across different restaurant categories. The findings show the universal problems the restaurant sector, as one of the major employers in any local economy, faces.

Rehiring staff who had to be laid off during the closure period is a slow process that occurs in tandem with the economy opening up. However, different restaurant categories in the US had different experiences and it will be interesting to see what the re-opened sector in Ireland will look like in terms of business volumes and employment levels. 

In the US, 66% of restaurant employees were unemployed at the height of the lockdown, one of the most significant losses of any of their industry sectors.

The full service segment saw the largest job losses during lockdown. In the first month back after lockdown, only 28% of jobs lost were re-gained. 

Quick service and casual dining establishments had fewer losses during the lockdown as many ramped up service for off-premises dining and in the in first month back, 37% of jobs lost were re-gained.

Snack and non-alcoholic bars, which include coffee shops, were the least impacted with 36% of jobs lost regained in the first month post-lockdown. 

Unsurprisingly, bars returned only 17% of jobs lost in the first month after lockdown, as social distancing rules curtailed their ability to open and limited the number of patrons on premises.

The other area of very significant job losses in the sector was the food service contractors. This is not surprising as events, conferences and catering facilities of large employers remain largely closed. This sector will be the slowest to recover.

If there are no additional relief packages from government in the near term, 75% of US restaurants said it is unlikely they will be profitable within the next six months.

The challenges of the investment needed to complete safety and social distancing measures, combined with concerns about low levels of customer footfall, which in some cases would not justify opening, and the inability of some employers to staff for re-opening because of staff safety concerns, are the key factors in delays in restaurants re-opening.

RAI logoAs specialist accountants to the hospitality sector, Crowe has recently joined the Restaurants Association of Ireland as a trade partner to help support business owners in this difficult time.

Our dedicated Hotel, Tourism and Leisure (HTL) team has vast experience providing a wide range of planning, operational and taxation advice and support to hospitality businesses. If you need support in devising the appropriate strategy for your business, please contact Aiden Murphy or a member of our HTL team.