A ‘perfect storm’ is wiping out America’s restaurants – here’s why the Midwest is hardest hit by closures

Americans are eating out less as inflation weakens the dollars in their wallets, leading to dire consequences for restaurants across the country.

Visits to sit-down restaurants were will decrease by almost five percent in 2023 from the year before, according to location analytics firm Placer.ai.

Even major metropolitan areas in the US known for their great dining options struggle to maintain an environment in which it is profitable to run a restaurant.

Eater NY reported this more than 40 bars and restaurants closed in New York City from December 2023 to January 2024, with some owners saying business simply never recovered after the 2020 COVID lockdowns.

But in a city where a person is needed over 22 years to eat in any restaurantthe problem is not so pronounced.

A restaurant in McKinnon, Georgia that was abandoned due to a lack of customers

In Central America, where there are fewer people and household incomes are lower, almost all restaurants feel the pressure of empty seats.

The capital of Iowa, Des Moines, for example, saw many restaurants close by due to lower pedestrian traffic. Of course, the establishments are aware of this, but this also applies to other regular restaurant visitors.

Abby Sheffer, a law student at Drake University, told local station KCCI that she and her friends have noticed that “there are a lot less people there.”

“We went to the barbecue place down the road, and we were the only ones there. And it stayed that way for two and a half hours,” Sheffer added.

Monica Wilke-Brown, a Des Moines native, said she thinks “people also got used to cooking at home and going out less.”

The latest victim of the glut of restaurant closings in Des Moines was Gusto Pizza, which was a persistently popular place to grab a bite for nearly a decade.

Monica Wilke-Brown, left, says that after the pandemic, people have become accustomed to cooking more at home and eating out less. Abby Sheffer, right, noted that she too has noticed the shorter lines at restaurants

Gusto Pizza, a Des Moines staple for nearly a decade, recently closed amid a wave of restaurant closures in the Midwestern city

Iowa Restaurant Association President and CEO Jessica Dunker says restaurants across the country are being hit by the double whammy of rising food costs and rising labor costs.

The dark, dreary interior of Gusto Pizza after its recent closure

Gusto Pizza pictured on a somewhat lively evening before its eventual demise

Jessica Dunker, the president and CEO of the Iowa Restaurant Association, said the reason restaurants are closing their doors is because the cost of goods has risen 30 percent and they have to pay higher wages to keep staff employed.

Dunker also pointed out that many food companies are struggling to repay the loans they took out during the pandemic. The deals, most of which included deferred loans with a term of thirty months, were probably necessary when the lockdowns were in full swing and restaurants had virtually no customers due to the law.

But with fewer visitors across the board, Dunker said restaurants are being forced to close if they can’t pay off their loans.

“Not just in the state of Iowa, but across the country, there’s been an increase in the number of small, independent restaurants that just can’t see what five or 10 years could look like in a way that makes business sense,” Dunker said .