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Was it lockdowns or COVID that killed the restaurants?

Updated: Mar 31, 2021

by Andrew Chalk

A corona virus orders a meal at a restaurant.
A corona virus orders a meal at a restaurant.

This article is about the sad closure of Knob Hall Winery in Maryland. I visited the state's wine industry in 2019 and Knob Hall made good wine. It wasn't something lacking in the product that led to their closure.

However, my article is prompted by the first sentence in the above article in which it attributes all (or most) pandemic restaurant closures to COVID. It is easy to gloss over the sentence as an uncontroversial repeat of a truism. However, on further reflection the statement is highly controversial. Were permanent restaurant closures the result of public fears of COVID when eating out, or were they the result of forced lockdowns that prevented in-person dining?

The answer to that question is worth billions of dollars in terms of the livelihoods of ordinary people who work in the restaurant industry. For, if lockdowns caused the vast majority of permanent closures (and I expect that lockdowns and fear of COVID both had some effect) then next time there is a pandemic we want to focus public policy on avoiding lockdowns.

The related question is, without a lockdown does COVID spread more successfully? Evidence is currently emerging that states that pursued fewer, shorter lockdowns, for example Florida and Texas, did not have higher incidences of COVID or rates of growth of COVID than states that pursued tight and lengthy lockdowns. The same evidence appears to be emerging internationally, where Asian countries with few or no lockdowns but strict mask policies appear to have rates of COVID no higher (and in some cases lower) than countries that had tight lockdowns.

In both cases, domestically and internationally, the panemic did serious health damage, but those economies that heavily locked down additionally sufferered devastating economic damage. For example, last October the New York State Comptroller's Office predicted that 50% of New York City's restaurants could close permanently. For a city synonymous with a vast, diverse restaurant industry that is a harrowing prospect. Furthermore, the restaurants that close are predominantly single-site family-owned establishments. Chains are better capitalized. Of course, restaurateurs will open new establishmments eventually but that will take time.

It will take some heavyweight empirical studies to unravel all the factors involved, but if you know a bright, numerate undergraduate who is burned out on Zoom calls, a quickly-accomplished term-paper length study of the difference between results in New York City and Miami would probably earn a scholarship to graduate school.

1 comment

1 Comment

Apr 02, 2021

I cannot speak to the East Coast, or with empirical evidence. However, I can speak to the West Coast and with some anecdotal evidence. Every time that some form of indoor/outdoor dining was allowed in California, restaurants were booked to whatever capacity the state had deemed "safe". Every time that one county would be locked down, and an adjacent county would be in a less restrictive tier, restaurants and any form of entertainment venue would be overrun with local refugees seeking any form of normalcy.

I think it would be foolish to say that restaurants and bars would not have suffered a loss in revenue regardless of restrictions. But when it comes to closures, 50-80% YOY is a lot easie…

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