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American restaurants are struggling to fill tables weeks after reopening

Many establishments are likely to close for ever

COVID-19 HAS infected every sector of the global economy. But perhaps none has been hit as hard as the restaurant industry. Lockdowns have forced many eateries to close; even in places without stay-at-home orders in place, few have dared to dine out. In America, restaurant spending has fallen by 51% between the start of the year and the end of April, according to the Census Bureau. Employment in the sector, which historically provided one in twelve jobs, has dropped by nearly half. Last week Steve Hafner, chief executive of OpenTable, a restaurant-reservation website, warned that as many as a quarter of restaurants in the country will never open their doors again.

The pain has been felt everywhere (see chart). Many consumers have opted to stay home even in the absence of lockdown orders. The state of Georgia, for example, shut down non-essential businesses only on March 24th. But according to OpenTable, which tracks the number of diners being seated at 20,000 restaurants, by then reservations in the state had already fallen by 99.99% compared with a year earlier. This experience was not unique to the Peach State. Across the country restrictions on restaurant operations came several days, or even weeks, after customers began staying away. According to OpenTable’s data, by March 13th, before any state had locked down—but after the World Health Organisation had declared covid-19 a global pandemic—bookings were already down by more than a third, on average.

Now that restrictions have eased, restaurant bookings are still far below normal. In Georgia, where restaurants have been open for three weeks, bookings are still down by 84%. In Florida reservations are down by 80%, in Texas by 75%, and in South Carolina by 67%, even two weeks after stay-at-home orders were lifted. American restaurateurs have enjoyed a steady increase in customers in recent years, as spending on eating out has for the first time outpaced expenditure on food at home. Many might have hoped that customers would immediately return to their pre-pandemic habits once government restrictions were lifted. But, as these data make painfully clear, the pandemic’s effect on people’s behaviour may be more damaging and longer lasting than many had thought. Hungry customers are instead flocking to drive-through services (offered by the giant fast-food franchises) or takeaway options, often through apps which can charge restaurants steep commission rates of as much as 35%. The chances of survival for small, independent eateries are looking increasingly dicey.

Editor’s note: Some of our covid-19 coverage is free for readers of The Economist Today, our daily newsletter. For more stories and our pandemic tracker, see our hub

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