Survey: Restaurant industry estimates nearly half billion in sales lost in Michigan

Melody Baetens
The Detroit News

Michigan restaurants lost an estimated $491 million in sales in the first three weeks of March, according to a survey conducted by the National Restaurant Association. 

It's estimated that 72,000 jobs were lost during the same time frame. 

The report is the result of a survey of 5,000 restaurant owners nationwide, conducted by the NRA March 23-29. 

Of those asked, just 9% of restaurant owners reported higher sales than the same time frame in 2019, and 7% said sales were the same. The remaining 84% reported a drop in sales for the last few weeks of Winter 2020. On average, they report a 43% decrease in business. 

Closed Nicky D's restaurant in Royal Oak, Michigan on April 1, 2020.

More than half of Michigan restaurant owners chose to stay open during the shelter-in-place order due to the COVID-19 pandemic. Forty-one percent opted to temporarily close their restaurants and overall around 60% cut hours of operation and employee hours. 

"This survey brings empirical data to what we have all witnessed in recent weeks — that the restaurant industry in Michigan is in free fall and at great risk of being completely decimated through no fault of its own," said MRLA President & CEO Justin Winslow in a statement sent to The Detroit News.

He says of the state's 16,000-plus restaurants, under the current circumstances as many as one-third might not make it through without "significant financial help and flexibility from our elected leaders." 

"Restaurants also need community support through purchases of carryout and delivery as they operate under a new business model," he said. "Restaurants make our lives better by creating spaces to join together with those we love and appreciate over a great meal.  If we want them to be there for us when this is over, they need our help now.”

The numbers are likely to get worse as the weeks go on.

“Now even today, the half that decided to stay open, half of them have closed their doors just because of lack of volume,” said restaurateur Joe Vicari, who owns 22 restaurants in Metro Detroit that employ more than 1,100 people. 

His Andiamo location inside the Renaissance Center in downtown Detroit was one of those restaurants. 

"We tried to stay open for the first week and we did literally no business," he said. To help the other seven Andiamo locations, they've started a buy-one-get-one-free entree deal to entice carryout orders. 

"That has sparked interest and we’ve been fairly busy with that, our margins are not there, but what it has enabled us to do is to bring more people back to work," he said, adding that it's still only a small percentage of their workforce.

"Of 1,000 employees we have only about 100 of them working now," he said, adding that it's still better than the five or so people per restaurant they had working before the BOGO deal launched. 

Two of the year's biggest dining holidays — Easter and Mother's Day — are this spring, and Vicari anticipates that they'll do less than 40% of sales they would normally bring for Easter. Both Andiamo and Joe Muer Bloomfield Hills will offer a carryout Easter brunch and dinner packages priced per person with all the fixings. 

"At the end of the day, we're all searching for what kind of federal and state help we're going to get. I can tell you that some of our lenders have reached out and they're willing to work with us," he said. "Not a forgiveness, but a deferment."

"Six weeks with no income coming in for the most part ... I don't know," said Vicari, who has owned the Andiamo restaurants for more than 30 years. "We've never been through this before. The world knows there's a crisis and people are just going to try to work through it, but I do believe you're going got see a fair amount of restaurants shut and not reopen." 

Nationally, the association estimates a loss of $25 billion in sales and 3 million jobs for the 22-day period last month. 

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Twitter: @melodybaetens