Why Restaurants Are So Fucked | Medium
COVID 19 is about to kill restaurants by the thousands. This pandemic is the ultimate pressure test and #restaurants are failing hard. Think about it: when we come out of this, your favourite #food spots might not be there any more.
Why are they so fucked? Let me explain.
Margins in the restaurant industry are notoriously small. Like tiny, actually. For reference, margins for banking, accounting, and legal services come in around 18–25%, healthcare 12-15%, and software 15–25%. Restaurants? 3–9%. Ya, like single digit. These razor thin profit margins have left restaurants with zero reserves. So when a crisis hits (like right now), they are pretty much screwed. Restaurant owners’ only options are to swallow their pride, beg, and hope for help — or throw in the proverbial dish towel. Did you realize how many restaurants don’t even have one months rent in the bank? It’s bananas!
via: Why Restaurants Are So Fucked | Medium