As the food and beverage (F&B) industry in the US prepares for phased reopening, operational and economic challenges prevail for both restaurant operators and landlords, indicates CBRE.
The COVID-19 pandemic has severely the $2.5 trillion F&B industry, with restaurants accounting for 60% of the 16.8 million jobs lost between March 19 and April 9, 2020 in the US. The National Restaurant Association estimates the industry lost more than $50 billion in sales in April as a result of closures.
Some restaurants that offered takeout/delivery service and curbside pickup were able to cover minimum expenses with ongoing off-premises services. However, this often generates only 10% to 20% of total sales and is insufficient to sustain the business.
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In addition, CBRE also points towards growing concern about permanent closures due to the loss of sales, mounting debt and uncertainty of loan issuance and forgiveness under the Paycheck Protection Program in the US. A survey conducted by the James Beard Foundation on April 16 revealed that 28% of small and independent restaurant owners do not believe they can survive another month of closure. Furthermore, only one out of five are confident they can sustain their businesses until normal operations resume.
In any case, F&B is expected to take a while to return to the ‘old norm’ of dine-out social experience. Restaurants and cafés will reopen amidst a lot of stringent guidelines around sterilisation and limited seating capacity. CBRE recommends the F&B industry to think of new ways of generating revenues – such as offer drive-thru option, curbside pickup, contactless doorstep delivery and even create personalised packs for stay-at-home family meals.