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Research - MARCH 8, 2023

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Many restaurants seeing profits decline despite bounce-back in sales

by Released

Landlords need to reset their expectations about restaurant profitability in the post-pandemic era — a “new abnormal” in which more restaurants are losing money despite rebounding sales, advised panelists in a Restaurant Finance Monitor webinar.

“A paradigm has been established over many years as to what constitutes a healthy restaurant with a supportable lease and rent, but in many cases that no longer applies,” said panelist Joe McKeska, a principal at A&G Real Estate Partners and leader of the firm’s restaurant industry practice. “Whatever you want to call the new normal — it’s more like the ‘new abnormal’ —we’re in it. You have to play the hand you’ve been dealt.”

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