Report lays out bleak future for Delaware restaurants

Two out of every three restaurant workers have lost their jobs since the beginning of the COVID-19 shutdown, and 20-30 percent of Delaware’s restaurants may close permanently, according to a State of the State report released Aug. 19 by the Delaware Restaurant Association.

“Not only is our state’s economic strength at risk without successful restaurants, but society risks losing a leading industry whose pride stands on the fact that restaurants are also the training ground for an entire workforce,” said Carrie Leishman, Delaware Restaurant Association president and chief executive officer.

In 2019, Delaware’s estimated restaurant sales topped $2.5 billion, but 2020 revenue indicators so far paint a bleak picture. From March to July 2020, the report states, restaurants lost $700 million in sales revenue.

A review of reported gross receipts revenue from the Delaware Department of Revenue shows reported revenue has dropped since the beginning of the pandemic in March. In June, reported gross receipts revenue dropped nearly 45 percent to about $150 million compared to nearly $300 million for June 2019. The actual amount of gross receipts collected in May dropped more than 50 percent compared to the previous year, with about 40 percent less in June and July.

“Without significant support and funding, the future of the industry is uncertain – an estimated 20-30 percent of Delaware restaurants may close permanently due to the devastating financial losses suffered during the shutdown and limited reopening,” the report states.

Delaware is listed third in the nation by the Bureau of Labor Statistics for job losses at eateries and drinking establishments, with a 66 percent job loss rate. “Delaware’s restaurant industry is one of the hardest hit nationwide,” the report states.

Carol Everhart has seen it firsthand.

An estimated two out of every three restaurant workers have lost their jobs, boosting Delaware’s total unemployment rate to more than 12 percent, exceeding the national rate of 10 percent. This is compounded by the number of young people out of work in Delaware – more than 18 percent, double the youth unemployment rate in 2019.

The absence of jobs for young people this summer has deprived many of their first-job experience, Leishman said.

“Restaurants are the community connectors and the neighbors we all want to have. They offer valuable entry-level work experience, second chances, and build valuable careers and entrepreneurial dreams,” she said.

Delaware restaurants are safe, the report states, listing Division of Public Health inspections that show high compliance rates in restaurants for face coverings (84 percent), table spacing 6 feet apart (94 percent), and COVID-19 signs posted (87 percent).

In total, the report states 92 percent of DPH inspectors said they are likely to return to a restaurant based on their comfort level and the establishment’s compliance with COVID-19 safety guidelines.

Since Delaware has not compiled contact-tracing details on super-spreader events or COVID-19 hot spots, the report used data from Maryland and Michigan, which show restaurants and restaurant workers are among the least common COVID-19 spreaders. Maryland statistics show 44 percent of super spreaders or hot spots occurred at family gatherings, followed by house parties at 23 percent and outdoor events at 21 percent.

“Neither data set points to restaurants or restaurant workers among top spreaders of the virus,” the report states.