Restaurant owners are in a class by themselves! They’re resilient! They’re creative! They're great problem-solvers! They’re probably the best entrepreneurs of any industry. During this pandemic, facing erratic government rules and regulations, they would be forced to re-invent themselves seemingly every week.
110,000 RESTAURANTS CLOSED
Unfortunately, according to Fortune magazine, as of Dec. 31, 2020 110,000 restaurants closed their doors permanently or temporarily and more than 2.5 million jobs were wiped-out.
But it looks like we’ve entered the light and the storm has cleared. Restaurants in most states are experiencing booming sales as customers, who miss the social aspect of dining and drinking, are flocking to restaurants and bars in record numbers with many restaurants and bars experiencing huge sales increases over 2019. Of course, those huge increases have placed pressure on restaurants to hire people, and when the government pays people to stay home it becomes a challenge hiring resulting in driving wages up…amazing how basic supply and demand laws work without the government mandating wages. But when our competitor is the government, there’s a deeper problem we face.
This huge sales increase makes sense when thousands of restaurants and bars shut their doors during this pandemic and the remaining stores pick up the sales from closed restaurants. The hardest hit were full service restaurants and bars and these categories are where we’re seeing the most closures and vacancies. But on the flip-side, these restaurants are booming now with sales in many cases doubling from 2019.
Restaurant brokerage was hammered last year as well with SellingRestaurants sales dropping by 50% over 2019. We’re seeing business picking up, but we’re also seeing few restaurant and bar owners wanting to sell, causing a shortage of inventory. In the past three months, we’ve sold 14 restaurants and we only have 40% of the inventory we had prior to the pandemic.
Buyers are starving for good businesses as well as looking to enter the business via leasing spaces. We’ve been writing offers and getting leases done. But having little inventory leaves buyers worn-out as they search for good businesses.
If you’ve thought about selling give us a call and let us evaluate your business. Or if you've thought about leasing a restaurant, let us find you a space! It’s free and confidential. 480.274.7000