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Report: the types of restaurants most impacted by COVID-19

April 13, 2020

The spread of the novel coronavirus (COVID-19) across the U.S. has been catastrophic for local restaurants across the country. As we detailed in a previous report, revenue at local restaurants nationwide have dropped to 50-70% below 2019’s figures since mid-March, with little sign of relief on the horizon.

As some of our previous studies have shown, 55% of small and local business owners say their business wouldn’t survive if sales stop for 1-3 months. 21% said their business wouldn’t even survive 1 month. Restaurants, where profit margins are famously razor thin, are likely even less likely to survive such a long downturn.

As more cities and states continue to enact measures to slow the spread of the virus, we fear a growing number of restaurants may be forced to close their doors.

The Womply Research team ran an in-depth analysis to learn just how many local restaurants have already had to close due to the spread of COVID-19, and which types of restaurants have seen the largest (and smallest) percentage stop transacting altogether.

How many local restaurants have stopped transacting entirely?

Here’s what we did in order to learn how many restaurants have closed due to the coronavrius:

  1. We analyzed credit card transaction data at restaurants who were regularly transacting between January 1, 2020, and March 1, 2020
  2. A restaurant was designated as “closed” if it didn’t process a single transaction for three straight days starting on March 1
  3. If, after that three day period, the restaurant processed a transaction, they are no longer considered closed and we back-update previous dates to represent that business as being “open”
  4. An important note: Restaurants who have shifted to processing 100% of their transactions via third party delivery apps (like Doordash, Grubhub, etc.) would also show as being “closed” by this metric

Taking the above requirements into account, here’s a look at how many local businesses in multiple categories have stopped processing transactions since the start of the coronavirus outbreak:

Note: if viewing on mobile, rotate device to landscape for best viewing experience of the charts in this article

Health and beauty, arts and entertainment, and bars and lounges all have been hit the hardest out of any category in our analysis. Restaurants, however, have still been heavily impacted.

Over a quarter of all restaurants in our analysis had stopped processing transactions by March 26th, and the number has been steadily increasing ever since.

Read our full report: How many local businesses have had to close due to COVID-19?

Which types of restaurants have been hit the hardest by COVID-19?

“Restaurants” is an extremely broad category of local business, encompassing everything from fine dining establishments to your local pizza delivery place. As a result, we expected certain types of restaurants to be less impacted by restrictions on dine-in services and orders to remain “takeout only.”

So we decided to take a “subcategory” view of all of the restaurants in our study and run the exact same analysis as in the chart above.

Here’s what we discovered:

Restaurants typically associated with takeout are closing at a lower rate, with one major exception

We started by grouping together the types of restaurants that are typically more firmly established as “takeout favorites.” This included fast food style restaurants like burger and taco joints, to-go standards like Chinese and Thai, and other “eat at home” joints like BBQ restaurants, pizza places, and wing shops.

As you can see, all of the types of restaurants in this group have fared better than restaurants as a whole with one exception: Chinese food restaurants.

By the end of March, over half of Chinese food restaurants, who might otherwise be perfectly suited to thrive in a “takeout only” environment, stopped transacting entirely. No other type of restaurant in this group even comes close.

Indian restaurants, burger joints, delis/sandwich shops, and taco shops were the next most impacted. Chicken and wings restaurants, meanwhile, saw the lowest number of closed locations, with pizza places also doing quite well.

Here’s another view, examining the overall percentage of each of the above categories that were closed as of last week:

While any percentage of restaurant being forced to close its doors is a sad statistic, it’s clear that Chinese food restaurants are facing an unfair backlash during this pandemic.

Of course Chinese restaurants, like all of those listed above, rely on a combination of takeout and dine-in sales. So let’s now take a look at how restaurants who typically skew more heavily on the “dine-in” end of the spectrum.

Dine-in restaurants are are struggling to stay open

Not every restaurant is as well-suited for “takeout only” restrictions as those who specialize in pizza or wings. Here’s a look at the types of restaurants we identified as being either heavily or partially reliant on dine-in services:

As you’d expect, the more a restaurant relies on a dine-in experience (and less on takeout or delivery) the more they’ve struggled to stay open during this pandemic. Buffets have been hit the hardest by far, no surprise there.

Chinese food restaurants, however, still stand out in this group. They’ve been hit equally as hard as bar & grills and steakhouses, two types of restaurants that typically rely almost entirely on dine-in traffic.

Again, here’s a look at the overall percentage of each of the above categories that had stopped transacting as of last week:

Again, the least impacted types of dine-in restaurants were those who are also considered more “takeout friendly” like: Thai, Mexican, Italian and Indian restaurants.

By all indications thus far, Chinese food restaurants have been experiencing significant enough discrimination to have a major impact on sales. Still, we wanted to take a look at one final group of restaurants, just to make sure.

Chinese food restaurants appear to be discriminated against far more than cuisines from any other part of the world

Our last group, international cuisines, reiterates just how hard things have been for Chinese restaurants across the U.S. since mid-March:

A few takeaways:

  • Once again, Chinese restaurants are closing at a far higher rate than similarly-grouped restaurants
  • Several of the next most impacted types of restaurants feature east Asian cuisine (Asian, Sushi, and Japanese)
  • The least impacted categories have been Thai, Mexican, Greek, Indian, and Italian

Here’s the look at last week’s figures for international cuisine restaurants:

Check back regularly for updated info

Every chart on this page will be updated daily, so please come back often in order to monitor exactly how local restaurants have been impacted as this situation continues to develop.

We will also be continuing to examine the data in new ways, and will add any helpful new charts we uncover in the future.

If you own a small business that has been forced to close due to COVID-19

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