For the first time in six months, more than half the nation’s restaurants were unable to scrape together enough revenue to cover their rents, according to an update from Alignable, an online network for small businesses.
The network’s research arm found that 51% of restaurants were delinquent on their September payment, compared to 35% of all small businesses. The figures mark increases of six and five percentage points, respectively, from the nonpayment levels of a month earlier.
In the case of restaurants, the proportion of the industry that couldn’t pay September rents jumped 11 percentage points from the level for July. In contrast, the percentage of September nonpayers across all small enterprises matched the figure for two months earlier. Outside of restaurants, delinquency rates for small businesses had been decreasing.
Eating places continue to lead all other businesses in their delinquency rate, outstripping massage therapists (48% in arrears), beauty salons (46%) and construction companies (42%).
The findings are another indication that the industry’s recovery from the pandemic is been sapped by the spread of the delta variant. A National Restaurant Association study released yesterday shows that 78% of restaurants saw a slowdown in dine-in business during recent weeks, and 55% expect sales to continue eroding through November.
Now, according to the association, 44% of operators expect the recovery to extend beyond another year, and 19% believe the business will never fully rebound.
Alignable found a particularly sharp spike in rent nonpayments among small businesses in Michigan, where delinquencies rose 15 percentage point, to 43% of the state’s smaller enterprises.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.