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These Restaurant Chains Will Struggle the Most in 2021, Experts Say

The coffee chain segment will be slowest to recover.

The initiation of vaccination programs across the country may have given Americans a new sense of hope for 2021, but there is still no definite end in sight to the ongoing coronavirus pandemic. This puts the food service industry into an increasingly desperate position, as recovery in that sector depends on states opening back up and allowing for denser foot traffic.

The extent of losses across the restaurant industry was demonstrated in a Dec. 2020 survey conducted by the National Restaurant Association. It reported that 17% of all restaurants in America had either shut down permanently or were temporarily shut down for an unknown length of time over the course of last year. A whopping 87% of remaining restaurants had reported an average decline in revenue of 36% during the same period. (Related: The Saddest Restaurant Closures In Your State.)

Now, experts are predicting that one particular food service segment will have a slower road to recovery than the rest: coffee chains. Bloomberg has reported that the domestic coffee segment saw a 25% drop in sales, representing an $11.5 billion loss for the United States coffee chains. And the drop in foot traffic has affected both national mega-chains like Starbucks and Dunkin' and smaller regional chains like Bluestone Lane.

Industry experts predict it will take years for coffee chains to get back on their feet, with sales not expected to be back to pre-pandemic levels until 2023.

There are glimmers of hope, however: at the time of this writing, the Starbucks stock is trading slightly higher than in the weeks leading up to the dramatic plunge in March of 2020, as the scope of the coronavirus pandemic became clear.

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Steven John
Steven John is a freelancer writer for Eat This, Not That! based just outside New York City. Read more