Important Takeaways:
- Shark Tank star Kevin O’Leary reveals why restaurants are closing down across America and warns MORE closures are on the way
- The US restaurant industry finds itself on the menu.
- Seemingly every day, there’s a headline announcing a bankruptcy, layoff or store closure impacting one of the country’s most beloved brands.
- Last month, Red Lobster filed for Chapter 11 after closing nearly 100 stores. Cracker Barrel – with restaurants in 45 states – has seen its share value plummet over the last year. The once-booming chain Boston Market, which boasted 1,200 locations in the 1990s, is now reportedly down to two do
- So, what’s behind this fast-casual reckoning?
- It’s proof the inflation virus is still infecting America’s post-pandemic economy.
- Supply chains crippled by the COVID pandemic lockdown haven’t recovered. Food costs – especially for proteins like chicken, beef and seafood – are up 30 to 40 percent over the last 36 months. Worst of all for the restaurant industry – customers haven’t returned from the shutdowns.
- Business closures and social-distancing mandates forced people to change the way they eat. Sixty million Americans – a massive chuck of the population that is aged 60 years and above – were forced to use their smartphones to order a ‘treat’ dinner for the very first time in 2020.
- In order to survive, many have had to transform themselves into commercial kitchens specializing solely in takeout.
- Some businesses will have to go bankrupt, reorganize themselves entirely and move to less expensive areas.
- However, there’s nothing to be done when consumers simply refuse to spend.
- Newsom signed a law in September jacking up the minimum wage for fast-food workers from $16-per-hour to $20 – making decades-old businesses unprofitable overnight.
- One California trade group estimated the Maduro-style edict led to the firing of nearly 10,000 workers even before the law went into effect on April 1.
- A West Coast Burger King franchisee with 140 restaurants announced he’d replace workers with digital order-taking kiosks. A major Pizza Hut operator eliminated delivery services and laid off thousands of drivers.
- Now, just 90 days into the new regime, businesses are dropping like flies.
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