Economy

Experts: Restaurant Industry Could See Another Round Of Bankruptcies

Experts: Restaurant Industry Could See Another Round Of Bankruptcies

As the approaching colder months are set to make outdoor dining less feasible, and government money dries up, experts are predicting another cycle of restaurant bankruptcies, CNBC reported.

Dining sales bounced back measuredly over the summer, fueled by outdoor dining and people tired of cooking. The decline in temperature ahead could stop the progression or even undo the headway already made.

JLL’s Head of Restructuring Services Tom Mullaney said per CNBC, “If it’s a bad COVID winter, it’s going to be a horrible winter for restaurants.”

Those knowledgeable about the industry indicated that they don’t anticipate a complete recovery without a COVID-19 vaccine, CNBC reported.

The virus, for its part, has disrupted the dining space ever since it started and led to a steep drop in sales in the nascent days of pandemic restrictions.

As PYMNTS reported previously, the pandemic could have an unexpected casualty — a sizable share of U.S. restaurants. Mandates from the government have shuttered restaurants for months on end, made them just provide takeout, and/or decreased the occupancy levels in the dining room.

Experts have indicated that those conditions are sufficient to close a number of eateries permanently.

Separately, the National Restaurant Association last month released a Blueprint for Restaurant Revival to help put the industry on an even keel and rejuvenate it.

The plan is comprised of different main areas on which Congress can focus to help offer aid to the industry.

In May, Related Cos. Chairman Stephen Ross said bankruptcy could be the future for a number of merchants amid the pandemic’s ongoing effects.

“You are going to have such a flood of cases going to the bankruptcy court,” Ross said. “And these aren’t really the type of bankruptcies that were induced by bad practices."

"It’s really all driven by the pandemic," he said.

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