Dear Eater SF,
Because of the coronavirus crisis, how many restaurants are going to close … forever?
We’ve been getting this question a lot, and even more might be too afraid to ask. Of course, no one knows what’s going to happen: When restaurants will be allowed to reopen dining rooms, how many diners will actually feel comfortable coming in, and what places have the cash reserves to stay afloat while business is down. Still, there are plenty of predictions flying around. Here’s a quick rundown of the sad math thus far for the country, state, and our fair city by the Bay, with a couple of opinions from smart local experts.
For the national big picture, at the end of March, the National Restaurant Association (NRA) did a survey and heard back that across the country, 3 percent of restaurants had already closed permanently, and that 11 percent more were anticipating having to close in the next 30 days.
The James Beard Association has also been running a couple of surveys, and painted the darkest picture. In mid April, the organization reported that 80 percent of restaurants were uncertain that they would be able to stay in business.
At the state level, the California Restaurant Association (CRA) estimated that the crisis could permanently close 30 percent of restaurants. In a letter sent to Governor Gavin Newsom, the group said that unless decisive action was taken, as many as 30,000 of the state’s 90,000 restaurants might shutter for good.
And zooming into the city, the Golden Gate Restaurant Association (GGRA) told ABC7 that if nothing changes, they fear that up to 50 percent of our city’s restaurants could close.
San Francisco is already one of the most challenging places in the country to keep a restaurant open. San Francisco has 4,415 restaurants, according to SF Travel. Last year, 384 restaurants opened, and 535 closed, overshadowing by 40 percent, according to SF Business Times, which was tallying permits from the SF Department of Public Health.
In terms of how she got to that 50 percent prediction, “It’s a gut number, based on talking to people right now,” Laurie Thomas, executive director of the GGRA tells Eater SF. Thomas has been comparing predictions for the state and the country, and has been in close communication with local restaurants. “Anecdotally, one out of two people can’t see a way to stay in business.” The GGRA is currently running their own survey in the city, and hopes to share numbers soon.
The announcement from the governor with reopening guidelines was as expected, in terms of changes to dining room capacity, and restaurants are already staring at their floor plans. Some nabbed payment protection program (PPP) loans, which means they need to rehire employees by the end of June, which might foreshadow a wave of shutters in July. Some might be holding out hope for additional support from the federal government. Others might be waiting for clear guidelines from the six counties, to understand exactly how reopening is going to work in the Bay Area, before making a tough call. “Without certainty, it’s that much harder to make a business decision,” says Thomas.
“That [50 percent] stat makes sense,” corroborated Jay Cheng, a spokesperson for the SF Chamber of Commerce. “San Francisco is a city that’s uniquely unsuited to sustain restaurants,” even prior to the pandemic.
The Chamber has also been advising businesses on whether or not to close, Cheng says, and it often boils down to two questions: How much do they make on takeout and delivery? And how many seats do they need to fill in the dining room? “A lot of restaurants need to fill 70 percent of their seats, 6 nights a week,” Cheng says. “They already know they are never going to break even.”