60% of San Francisco Restaurants Are in Debt, Survey Finds
This week, SF New Deal released its results of a survey of 106 San Francisco restaurants in March 2021, where the non-profit advocacy organization and direct service provider sought to understand the economic situation that the industry is currently facing. What it found was that even though partial restaurant re-openings are taking place and some government aid has been made available, the number of restaurants in debt and the amounts of debt have increased.
Currently, SF New Deal says, 60% of restaurants are in debt, although only 34% were in debt before the start of the first shelter-in-place order in March 2020. In addition, the average amount of debt rose from $62,000 to $114,000 and restaurants are finding it more challenging to pay rent. Thirty-nine percent of restaurants are now behind on rent and approximately 50% of those are more than five months behind in rent.
SF New Deal also found that 40% of restaurants are continuing to report monthly losses in revenue and the sampling of the 106 restaurants showed a collective $7 million revenue loss monthly from the local economy. When this is extrapolated out to the city’s more than 4,000 restaurants, the organization says this reflects a $291 million loss from San Francisco’s overall economy.
The survey also showed that the lower revenues in local restaurants have driven layoffs and job cuts, with more than 80% of restaurants reducing their number of employees on the payroll since March of last year. In addition, 64% of restaurants had to cut more than half of their workers.
Although 63% of restaurants thought recovery will take up to an entire year, more than a third expect it to take years. “These survey findings help us to understand the financial challenges ahead for our restaurant partners who currently receive income through SF New Deal’s programs,” Executive Director Lenore Estrada said.
“The economic situation is even more dire for small businesses overall who do not have access to supplementary revenue streams from community feeding programs,” she stated. “We remain committed to advocating for long-term support from government agencies to ensure an equitable recovery for all small business owners.”