Restaurant chains were set to suffer major losses since the beginning of the pandemic, and Pie Five is the latest chain to announce a wave of permanent closures after Starbucks.
Even with dining rooms reopening in some parts of the country, it’s still nearly impossible for casual-dining restaurants to generate a profit at reduced dine-in capacity.
As a result, many chains have permanently closed some stores, and some brands have decided to throw in the towel altogether.
IHOP, Denny’s, and TGI Fridays are among the chains that have cumulatively closed over 600 restaurants for good.
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It has begun.
As soon as the pandemic hit, restaurant-industry experts knew that many restaurants wouldn’t make it through. On April 1, UBS predicted that one in five restaurants may close as a result of the pandemic.
While independent restaurants have been hit much harder than many chains, chains aren’t immune. Chains often rely on independent owner-operators to run restaurants, and these franchises often don’t have the same robust financial resources of the brands they represent. On Wednesday, Starbucks became the latest chain to announce a wave of permanent closures in its latest SEC filing.
Even though much of America is opening up, most locales have implemented social-distancing guidelines that make it impossible for restaurants to generate a profit even if they reopen dining rooms. And early data has indicated that reopening isn’t the fiscal cure-all some hoped it would be, especially for restaurants.
Some chains have already filed for bankruptcy protection or closed all restaurants. Others are taking a slower, quieter, or more measured approach to closures. However, this is likely only the beginning of a large wave of closures for casual-dining concepts, which are much less likely to make it through the pandemic unscathed than delivery-oriented restaurants.
Here’s a list of chain-restaurant closures since the pandemic started.
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TGI Fridays: as many as 20% of the chain’s 386 restaurants
On May 26, TGI Fridays CEO Ray Blanchette told Bloomberg that the chain could permanently close up to 20% of its 386 restaurants.
As restaurants reopen with limited dine-in capacity, TGI Fridays is experimenting with outdoor tent …read more
Source:: Business Insider