Here’s how many restaurants have closed during the pandemic

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Doomsday prophets came true just days after indoor restaurants closed in major cities in March 2020. Chef, owner, and activist Tom Colicchio predicted 75 percent of restaurants would close due to the pandemic (he later reduced his nightmare scenario to 40 to 50 percent). A month later, the newly formed Independent Restaurant Alliance went even further, predicting that “up to 85 percent” of independent restaurants would be closed.

This collapse could have resulted in the loss of hundreds of thousands of restaurants. But no such extinction has occurred, as one advocate described the potential impact of the pandemic. The number of closed organizations so far is just a fraction of those terrible early predictions, which were largely based on concerns or a survey of small businesses with recognized flaws or just informed guesswork.

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How many restaurants have succumbed to the pandemic, with its mixture of public health restrictions, government shutdowns, and the anxiety of joint dinners? This number is difficult to determine.

The National Restaurant Association (NRA), a trade group that advocates for the industry, includes an internal economist as well as a senior vice president of research to provide reports, data, and insights to members and the public at large. When the NRA lobbied Congress for relief for the stricken industry, the group attempted to calculate the damage that had already been done, whether or not the restaurateurs were members of the association.

By the spring of 2021, the association had settled on a number: 90,000 closed restaurants, both temporary and permanent, including neighborhood restaurants, cafes, outlets, pubs, bars, and restaurants. This number was repeated several times, by the media and politicians, in the months following its release by the NRA. That number has not been updated in over a year, in large part because the NRA believes that, more than two years into the public health crisis, the current restaurant closures may not be the only result of the pandemic.

Is there a better way to determine – or even estimate – how many bars and restaurants have closed during the pandemic? Discovering first means examining the NRA’s own estimate – and how it arrived at it.

The NRA has tackled the massive task of accounting for damage by sending out email surveys to hundreds of thousands of recipients. The group then extrapolated the results – the percentage of restaurants closed – against the total number of “food services and drinking places” in the United States, as defined by the Bureau of Labor Statistics (BLS). That number, just before the pandemic, was about 660,000 establishments.

For example, in December 2020, the association estimated that nearly 17 percent of food and beverage establishments had closed, based on survey responses from 6,000 restaurant operators and 250 supply chain companies. Then the NRA used that percentage to calculate that about 110,000 institutions had closed, at least temporarily.

Several months later, in April 2021, the NRA lowered its estimate to 90,000 because “many of those temporarily closed restaurants reopened,” the association said in a data analysis sent to The Post. It was based on questionnaire responses from 2,500 restaurant operators.

One thing to keep in mind about the Food Services and Drinking Places number, as calculated by the BLS, is that it includes many businesses that are not restaurants in the strict sense of the word. The number also includes airline food service contractors, sports facility franchisees, caterers, street vendors, ice cream and food trucks, coffee shops, cake shops, cocktail lounges and nightclubs.

Economists and analysts say flaws in the NRA’s methodology, at least the parts in common with The Post, are not unique to this trade association and its email surveys. The response rate was small. Respondents were self-selected, and no random samples were taken. Email lists may not reflect the composition of the industry as a whole.

For its part, the NRA decided early in the crisis that it would survey more members. In our first pandemic survey, in March 2020, the NRA went with a mailing list we had, but in a very, very short time, our mailing list had grown to become restaurant operators who weren’t members because we weren’t limiting pandemic information to us,” says Vanessa Sinek, the association’s director of media relations. We have members only.

“We’d send it to anyone who wanted to be on the mailing list,” she says. “We’ve tried to get representation from all parts of the industry in those surveys, so we know how they’re affected.”

The NRA’s closing numbers were, of course, in service of a much larger goal: securing federal assistance for an industry that was in free fall. The estimates were not necessarily intended to be airtight.

Another way to determine the number of restaurants closed at any one time is to review the Business Employment Dynamics (BED) statistics, which were compiled from the BLS Employment and Wage Quarterly Census. These statistics include quarterly tracking of business closings within the broad category of “food services and drinking places.”

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Catherine Abraham, a University of Maryland economist, calls the BED numbers “extremely reliable” even though the Natural Resources Authority warns that they include temporary or seasonal closures, as well as permanent closures.

In 2020, according to children’s bedroom data, the total number of closures reached 159,000. In the second quarter of 2020 alone, with government restrictions starting in full swing, BED statistics show that more than 72,500 food and beverage establishments have closed, more than tripled The quarterly average of about 20,300.

But these numbers do not represent the normal annual change of closings. From 2011 to 2019, according to BED data, an average of more than 81,000 food and beverage establishments closed each year. If you subtract that average from 159,000, you get approximately 78,000 additional closings in 2020.

However, the 78000 figure is still based on the larger category which includes establishments other than restaurants and bars. The BED stats aren’t broken down into smaller subcategories, but based on the numbers milled by The Post, restaurants and bars make up about 94 percent of the larger BLS group. This means that in 2020, about 72,700 more restaurants and bars will close than usual, apparently due to the pandemic, a 95 percent jump from the average annual rate.

This is a clear sign of the devastating impact of the pandemic, representing hundreds of thousands of jobs lost which in turn affected countless lives and communities.

After a turbulent 2020, closing rates stabilized during the first three quarters of 2021, according to Latest BED statistics available: about 19,500 each quarter, lower than the pre-pandemic average of 20,300.

The numbers seem to indicate that the industry has survived the worst of the pandemic. It might also reflect an optimistic trend: More bars and restaurants reopening, given that BED data includes temporary closures. If you add the BED closings so far during the pandemic, subtract the average closing rate and just adjust the numbers for bars and restaurants, you get a total of about 70,300 establishments closed so far.

The NRA has not conducted a recent survey to adjust its 90,000 figure, in large part because the pandemic is just one factor — along with food costs, fuel costs, staff shortages and more — that could lead to restaurant closures at this point, Senek says.

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“There was a period of time when there were lockdowns because of the pandemic,” Sinek says. “I don’t know that it can now be said that all the closures were due to the pandemic, unless we are calling everything that is happening now the pandemic’s long tail.”

Restaurant advocates say the low 2021 closing rates do not reflect what they hear from operators and may mask a larger problem looming: thousands of operators, mostly independents, still mired in debt; They added to their debt burden after assurances from the federal government that they would get relief through the Restaurant Revitalization Fund. After one round of RRF grants, Congress was unable to muster votes in May to renew the fund.

“Just like we hear the stock market is doing well and then we go to Main Street and it’s not great, I feel the same way about BLS numbers,” said Erica Polmar, CEO of the Independent Restaurant Coalition. “Things may look great on paper and maybe we’re thriving, but when you go out and talk to the community, it’s not good.”

With RRF almost completely replenished, the alliance expects that more than half of those 177,000 restaurants that were left out in the cold from the first round will close permanently. If true, that would be more than double the current number of closures during the pandemic, although a certain percentage of them may have closed even without the health crisis.

Colicchio, who predicted a 75 percent mortality rate at the start of the pandemic, says government assistance is the main reason no more widespread damage has occurred. Without money from RRF, the Paycheck Protection Program and other programs, he says, the closing rate might not have been 75 percent, “but I think it’s a lot more than we saw.”

Colicchio has lost one of his eight restaurants during the pandemic, and he’s giving it back to his bad landlord. But Colicchio, like other independent restaurants, has debts. He says he owes “nearly a million dollars” to just one owner.

“They don’t push me, but sooner or later, they’ll start,” Colicchio says. “We are not out of the woods yet.”

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