“Catastrophic” — The State of Restaurant Wine Sales
In a press release that outlined the state of depletions (sales from wholesalers to restaurants/retailers) over the past 12 months ending in September, SipSource analyst Dale Stratton described on-premise (restaurant/bar) alcohol sales this way:
“The situation in the on-premise is nothing short of catastrophic and continues to get worse every day.”
It’s possible that Stratton was understating the situations for restaurants and bars. This is particularly the case as many states engage in a second round of shutdowns of restaurants and bars as COVID cases rise.
In July, Yelp reported that 60% of the 26,000 restaurants on its platform that had temporarily closed will never open again. In October, New York State Comptroller reported that within six months 33% to 50% of restaurants open prior to the pandemic could close by April of next year. Both these predictions were made prior to the recent huge increase in COVID cases and the second round of restaurant/bar shutdowns that are now being put in place across the country.
All of this goes a long way toward underlining Stratton’s assessment of restaurant wine sales as “catastrophic”. It strikes me that America’s restaurants and bars are playing pass blocker to COVID’s blitz while the rest of us are being forced to scramble. The offensive line never gets the credit it deserves.
If any economic sector has been hit harder during the pandemic than restaurants, I’m not sure what it is. Perhaps airlines, cruise lines, or movie theaters. But it also highlights an important mission that states must now consider: Do we immediately provide industry-specific aid to try to keep restaurants from failing? And/or when the vaccines are distributed and the pandemic wanes, should states find some method for providing aid to surviving restaurants for the role we’ve asked them to play. For many restaurants no longer in business, the effort will be too late. But this is no reason not to extend tax relief or some other method of compensating these hardest-hit businesses after taking the biggest hits.
Meanwhile, the National Restaurant Association is urging state governors to not engage in a second round of restaurant shutdowns and offering up evidence that the risk of transmission in a restaurant setting is far lower than the shutdown orders appear to assume.
Just because folks cannot or won’t drink their alcohol in an on-premise setting during the pandemic does not mean they have given up drinking. Rather, statistics suggest they are largely doing their alcohol consumption in their homes. Retail and grocery store and online sales of alcohol have increased significantly since February. This makes sense, but it doesn’t help the restaurants that are devastated by states’ actions to control the spread of the virus.
The question for lawmakers is simple. Do we allow a huge swath of restaurants across the country to simply disappear in the wake of COVID and state’s restaurant shutdown orders or do we act to aid these institutions?