Ever since the pandemic began just over a year ago, it's seemed as though restaurants just can't catch a break. First, dining establishments were forced to close to in-person dining and limit themselves to takeout and delivery only -- a model that forced them to lose a ton of money to delivery app fees. Then, once restaurants were allowed to open to diners, they were largely limited to outdoor seating or otherwise had to adhere to strict capacity limits.
Along the way, there have been other issues restaurants have encountered, like securing propane or finding workers to fill open positions. And now, they're dealing with a new unexpected challenge -- a shortage of chicken.
Another setback restaurants can't afford
Chicken is a staple item for many restaurants across a range of cuisines. It's cheap, it's versatile, and it's generally easy to secure in bulk. Except now, it isn't easy to come by.
The demand for chicken has soared over the past year as Americans took solace in comfort foods and spent more money at fast food establishments, for which chicken helps anchor the menu. And that demand, coupled with supply issues stemming from coronavirus outbreaks at meat processing plants earlier on in the pandemic, has caused a shortage of chicken -- wings in particular.
Not only are restaurants struggling to get their hands on an adequate supply of chicken, but they're also being forced to pay more for it. In fact, some restaurants are now rethinking their menus in an effort to not only trim their costs but avoid spinning their wheels to get their hands on an item in very short supply.
Will a lack of chicken cause restaurants to shutter?
It's estimated that more than 10% of U.S. restaurants have closed permanently in the course of the pandemic. And that, in turn, has had a profound impact on commercial landlords.
These landlords rely on restaurants to pay rent, and the fact that so many have closed means some are grappling with vacancies. Of course, at a time when there's still so much economic uncertainty and the pandemic is still active, businesses, for the most part, aren't exactly rushing to open up new locations. As such, landlords who lose restaurant tenants in the near term may get stuck with vacancies for a fairly long time.
The good news is that there's now dedicated relief available to restaurants thanks to the Restaurant Revitalization Fund, which will divvy up $28.6 billion into grants for struggling establishments. That money could go a long way toward preventing further closures. But with a chicken shortage thrown into the mix, restaurants that are barely scraping by could be pushed over the edge. And that's something commercial landlords may need to prepare for.
The Millionacres bottom line
Of course, in an age when more people are adopting vegetarian and vegan diets, it may be a good time for some restaurants to pivot and revamp their menus. But for family-style or fast-casual eateries, taking chicken off the menu is something that just won't fly, so for their sake as well as investors', let's hope that this current shortage is only a temporary thing.