Estimate: COVID-19 will permanently close 1/3 of restaurants

Coronavirus

GRAND RAPIDS, Mich. (WOOD) — Restaurants are perhaps among the hardest-hit industries as the coronavirus pandemic forces closures across Michigan and the country. A survey released Wednesday by the state and national trade groups are showing just how bad it could get.

The Michigan Restaurant & Lodging Association, which represents more than 5,000 restaurants statewide, conducted a survey of its members that came to an unsurprising but grim conclusion.

“(The) restaurant industry is being decimated by the closure, broadly speaking, of the general society,” MRLA President Justin Winslow said.

The survey found that most restaurants are laying off staff, reducing hours and the majority say they are looking at a temporary closure in the next 30 days. But the most shocking conclusion was how many may never reopen.

“Approximately 1 in 10 restaurants have either closed permanently or intend to over the next 30 days. That’s troubling, that’s a high number. We think the number could jump to 1 in 3,” Winslow said.

With 16,000 restaurants in Michigan, that could work out to more than 5,000 closing, leaving perhaps hundreds of thousands no longer working in the industry.

Winslow said the industry was already under going generational changes and the pandemic has only hurried that process on.

He said while restaurants are working to be creative, there are many that are simply unable to continue to pay the bills. Even chains are operated by local franchise owners who only own one or two businesses.

“The restaurant industry is going to look much different two or three years from now than it does now,” Winslow said.

Those statistics are borne out by what people are seeing in West Michigan, including Rob Kowalewski, a second-generation restaurateur who owns Jose Babuska’s in East Grand Rapids and Rio Grand Steakhouse northeast of Grand Rapids. He was not shocked by the MRLA’s estimate.

“I can see that happening. And if a third of them close, there’s 600,000 restaurant employees, so that puts 200,000 people out of work,” Kowalewski said.

His restaurants are now open for only three hours a day, takeout only, cutting his business by more than 75%.

“(The restaurants can survive) a month, maybe two. I’m not making enough money to pay my rent, utilities, employees, taxes,” Kowalewski said.

>>LIST: Restaurants open for takeout, delivery during dine-in ban

This year is the eighth year that the Facebook page EatGR has been operated by Christopher Freeman, a realtor by trade. He says he regularly visits as many as 30 restaurants to run the page boasting more than 30,000 followers.

“It’s rough. We’re social animals. As human beings, we want to eat with people,” Freeman said.

He said West Michigan loves eating out but even before the pandemic, the restaurant business was tough.

“It’s devastating. Eating is a social activity. That’s why places have dining areas because they’re getting together with friends and family,” Freeman said.

He agrees that many restaurants will not return.

“I think a lot of the downtown restaurants who are destination locations for people that are seek entertainment, I think they’re going to have the toughest time, but I don’t want to take away from anybody else. It’s tough right now,” Freeman said.

The association is asking state and national governments to do more for restaurants, including redirecting Pure Michigan funds to help or to allow the restaurants to use the huge stocks of liquor they got for March Madness and St. Patrick’s Day crowds as collateral for loans.

The MRLA also has resources for restaurant owners to help survive that is now available to anyone regardless of membership at mrla.org/coronavirus.

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