Determining how many bars and restaurants have closed during pandemic is difficult
The COVID-19 coronavirus pandemic has devastated Ohio’s bars and restaurants. But assessing the extent of the damage is a fraught prospect.
Economists warn that the pandemic might be long over by the time the depths of the service industry’s struggles are fully known.
Dozens of establishments throughout central Ohio have closed their doors in 2020, including such well-known names as the Sycamore gastropub in German Village, Cosecha Cocina in Italian Village, Brazenhead Irish Pub in Grandview Heights, Belly Burger in downtown Columbus, Short North Coffee House, FireFly American Bistro in New Albany, Kingmakers Board Game Parlor in the Short North, Plantain Cafe in downtown Columbus, Bareburger and BLunch in Clintonville and La Scala Italian Bistro in Dublin.
La Scala was preparing for a record year in 2020, with more than 70 events scheduled, owner Nick Lalli said.
"With the pandemic, we lost Easter, Mother's Day, Ohio State's graduation – and, of course, everyone is canceling all their banquets," he said.
Without that business, La Scala no longer was able to pay its bills, Lalli said. Adding to the hardship, Nick Lalli's father, William Lalli, died of COVID-19 in June.
Three months later, the restaurant and event space closed its doors.
"It's extremely difficult," Nick Lalli said. "We lost him and laid off 55 employees on top of that, some that had been there forever."
How many restaurants are closed?
Knowing how many other restaurants have closed is difficult, however. No state or local entity tracks restaurant and bar closures, and no company or association can provide a complete list.
Economists and industry insiders have no doubt that the pandemic came down hard on restaurants and bars. Ohio’s coronavirus guidelines restricted seating and limited alcohol sales, and significant numbers of patrons are staying home to avoid contracting the disease.
“I don't have any real data on whether the restrictions imposed on people have a greater effect than attitudes about the news (on coronavirus),” said Scott Shane, a professor of entrepreneurship at Case Western Reserve University. “But since they're both going in the same direction, it's pretty bad.”
To make matters worse, much of the money from the Paycheck Protection Program, which was part of an economic-rescue package Congress had approved early in the pandemic, has been spent, Shane said.
Most shuttered restaurants provided no reason for their closure, but others cited the pandemic.
When restaurateur Gary McConnell closed the Phenix Bistro on Gay Street in downtown Columbus in June, he attributed the decision to a decline in his business due to office workers staying home to avoid coronavirus infection.
In a post on its Facebook page in May, Buckeye Chili & Smokehouse, also in downtown Columbus, said it would not reopen after a two-month stay-at-home order because COVID-19 had robbed the restaurant of its business.
How do national restaurant chains fare?
National chains, which generally have performed better than their smaller, independent counterparts, have not been immune. White Castle, for example, closed two central Ohio locations this year.
“Because of the fluid nature of the situation, it’s been challenging to keep track of openings and closures.” Ohio Restaurant Association spokeswoman Homa Moheimani said.
The National Restaurant Association estimates that at least one in six restaurants have closed nationwide this year, and surveys from the Ohio Restaurant Association suggest that Ohio has lost a similar proportion of its more than 23,000 restaurants, Moheimani said.
That would add up to nearly 4,000 Ohio restaurants falling to the pandemic.
Other data points, such as job losses and consumer spending, also hint at business closures, experts said.
“We know that at the height of the crisis, the restaurant industry lost about half their employees,” said Michael Jones, an economics professor at the University of Cincinnati.
Before the pandemic, Ohio’s food-service workers numbered roughly 400,000, according to the Bureau of Labor Statistics, but that figure fell to about 200,000 shortly after the pandemic took hold in Ohio in March and Gov. Mike DeWine announced a two-month stay-at-home order.
Spending at restaurants plummet
Spending at bars and restaurants also plummeted at the onset of the pandemic and has yet to fully recover.
Americans spent roughly $65.4 billion at restaurants and bars in February, according to the U.S. Census Bureau. That figure decreased to $45.7 billion in March and $30 billion in April, and it slowly recovered in the following months, hitting $55.6 billion in October.
“Those restaurants that previously were servicing those customers have had to cut back,” Jones said.
The job losses and business closures resulting from the Great Recession a decade ago weren’t totally clear until years after the country emerged from the economic tumult, Shane said.
“Eventually, economic historians will look back in 10 years and tell us what happened,” he said. “We know now when the worst point in the (Great Recession) was, but we didn't know it when it was happening.”
When will restaurants reopen?
Those restaurants that have shuttered might not be gone for good.
“Are they permanently closed or are they just temporarily closed? In the stats you’re not going to see permanently closed numbers,” Shane said.
Even if a comprehensive list of bar and restaurant closures were available, the damage wrought by the coronavirus would be difficult to assess. Food service and late-night entertainment can be cutthroat businesses, and a significant number of taverns and restaurants close every year anyway, economists said.
“Depending on who you talk to, anywhere from 60% to 80% of restaurants fail over five years,” said Luke Pittaway, a professor of entrepreneurship at Ohio University. “So even in a normal situation, there's a very high failure rate.”
Initially, it can be difficult to tell which closures are permanent. When McConnell closed the Phenix Bistro, he told The Columbus Dispatch he hopes to open another restaurant.
Thus far, that hasn't happened.