Restaurant losses called “catastrophic” as Darden’s sales plummet
The new CEO of the National Restaurant Association (NRA) has said the industry’s losses due to COVID-19 are “catastrophic.”
Former Sysco President and CEO Tom Bené, named CEO of the U.S. restaurant trade association last month, told Nation’s Restaurant News there were around eight million restaurant industry employees who lost their jobs or were furloughed at the height of coronavirus restrictions.
“The biggest challenges we are facing as an industry right now – and certainly over the past few months – are the catastrophic losses we’ve had both from an employment standpoint and revenue or sales standpoint for restaurants,” he said.
The NRA predicts that industry losses due to the pandemic will reach USD 240 billion (EUR 214 billion).
Adding to the industry’s woes, Darden reported a steep drop in quarterly sales and said some of the company’s restaurants will be closed.
Orlando, Florida-based Darden said its fiscal fourth quarter 2020 sales dropped 43 percent to USD 1.27 billion (EUR 1.13 billion). Its same-restaurant sales plummeted 62.5 percent for The Capital Grille, 65.2 percent for Eddie V’s, 70.7 percent for Yard House, 69.9 percent for Seasons 52, 66 percent for Bahama Breeze, 45.3 percent for Longhorn Steakhouse, and 30 percent for Olive Garden.
Additionally, Carlsbad, California-based Rubio’s Coastal Grill is closing 12 of its approximately 170 locations, and Houston, Texas-based Pappas Restaurants group is permanently closing five of its locations in the city, including Pappas Seafood House, Pappadeaux Seafood Kitchen, and Pappas Shrimp Shack, Preview reported.
McCormick & Schmick’s is closing some of its restaurants as well.
Large chains that serve seafood are also shutting down many of their eateries, with Dallas, Texas-based TGI Fridays permanently closing up to 20 percent of its 386 restaurants, Bloomberg reported.
Orlando, Florida-based FoodFirst Global Restaurants, which operates the Bravo Italian Mediterranean and Brio Italian Mediterranean restaurant chains, recently filed for bankruptcy after closing 71 of its 92 locations.
Despite the significant challenges caused by COVID-19, the full-service restaurant industry “plays a vital role in our communities,” Darden CEO Gene Lee said in a press release.
“As our industry continues to rebuild, there is significant opportunity to increase market share,” Lee said. “Those executing at the highest level are going to win, and Darden is well-positioned to take advantage of the opportunity.”
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