Just doing some simple math, back of the envelope calc, so bear with me.
1. Restaurants tend to have small profit margins. I’ve often heard they are in the range of 3 to 5%.
2. If restaurants can only fill to 50% of capacity, they are taking a 50% cut in gross revenue.
3. Compare that 50% reduction in gross revenue to a 5% profit margin.
4. While some costs of doing business, such as food and labor costs, will be reduced if operating at only 50% capacity, the restaurants cannot reduce their expenses by enough to offset such a huge reduction in gross revenue.
These are back of the envelope calculations; I know there are some variables we need to look at to get the true picture.
But the point is, to slice the sales of a business by 50% is going to severely hurt, financially.
Or even 25%.
You cannot cut the rent/mortgage, insurance costs, many utilities or - especially - advertising. When you can only fill 1/2 or 3/4 of your seats, if you have ANY chance to even survive, you’ve got to compete for those limited customers (against other restaurants that are just as desperate as you).
Oh, and extra employee time for the Covid-mandated cleaning, plus extra expense for plastic shields, etc.