- A new report from Alignable found that 49% of small restaurant businesses could not afford to pay their rent in full and on time in October.
- The report attributed the trend to declining traffic as customers face soaring prices.
Forty-nine percent of America’s small restaurant businesses couldn’t pay their rent in full and on time in October, according to a report by Alignable, an online network for small business owners headquartered in Boston.
That’s well above the national U.S. average of 37% of small businesses in all industries that were unable to pay their rent. And the rate for restaurants, the report notes, “is already quite high when you compare it to many other months over the past 2.5 years.”
The restaurant industry reached a new rent delinquency high, tying with the automotive sector for the second-worst rate in the country. Only the education sector has a higher rate at 57%.
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It’s the highest rent delinquency rate experienced by the restaurant industry in 2022, according to Alignable. It compares to a 36% rent delinquency rate in September. As Nation’s Restaurant News (NRN) reports, Alignable attributed the trend to declining traffic as customers cope with inflation as well as higher rent prices for commercial properties, which affect smaller businesses more than the larger chains.
According to NRN, restaurant traffic growth was -5.1% in July, down .04 percentage points compared to June. For the five-month period ending in July 2022, same-store traffic experienced negative year-over-year growth.