Operations

Independent restaurants contend with a new inflationary problem: Climbing rents

A new survey found that 63% were hit with an increase in 2023, leaving 45% unable to cover their June fee.
Restaurant rents have risen 1% so far in 2023. | Photo: Shutterstock

About 2 of every 3 independent restaurants in the U.S. have been hit with a rent hike since January, leaving 45% of the operations unable to pay landlords the full amount due for June, according to a new survey.

The canvass by Alignable.com, a website serving the small-business community, revealed a 1-point upswing in independents’ rent-delinquency rate for May.

Yet restaurants fared better than many other small businesses, Alignable found in its survey of more than 4,000 operations across all industries. Almost 3 of 5 (58%) came up short on their June rents.

The exceptions were small businesses in Colorado and Michigan, where delinquencies fell by 5 points to a nonpayment rate of just 11%.

The highest delinquency rate was clocked in New Jersey, at 48%.

About 16% of the respondents indicated that their rents were raised by at least 20% since June.

Alignable noted that 63% of the small-business respondents also reported their revenues are still below pre-pandemic levels, indicating that margins are being squeezed. About 53% of the participants said their profits have dropped at least in half since last year.

The company did not break out the revenue and profit figures for restaurants.

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