U.S. Restaurants Are Being Devastated By a ‘Perfect Storm’ – This is Why the Midwest is Hit Hardest

By: Georgia | Published: May 13, 2024

As Americans feel the pinch of inflation, fewer are dining out. 

A 2023 report from Placer.ai shows a nearly five percent dip in sit-down restaurant visits compared to the previous year. This marks a notable shift in how we’re spending our dining dollars.

City Eats on the Decline

Even New York City, a beacon for food lovers, isn’t immune to economic downturns. 

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A vibrant restaurant scene with customers dining under decorative hanging light fixtures

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From December 2023 to January 2024, over 40 establishments shut their doors for good, unable to recover post-pandemic. 

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The Midwest Feels It Most

The economic squeeze is tighter in the Midwest, where many communities see more empty tables.

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A modern restaurant with stylish blue chairs and tables set for dining, with large windows and pendant lights

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The region’s lower population and income levels mean its restaurants are often hit hardest, with nearly every local spot feeling the impact.

Des Moines Dining Downturn

In Des Moines, Iowa, the story is similar, with many restaurants closing due to a lack of customers.

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This trend affects establishments old and new, illustrating broader issues within the local food scene.

Empty Tables

“There’s a lot less people,” observes Abby Sheffer, a Drake University law student, during an unusually quiet meal at a local BBQ joint, as reported to KCCI.

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A view of an empty restaurant with rows of tables and chairs in a dimly lit interior

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Her experience highlights a stark decline in patronage that many eateries are experiencing.

Shifts in Consumer Habits

More people are opting to eat in, says Monica Wilke-Brown, a Des Moines local. 

A woman smiling as she stirs a pot on a stove in a well-equipped modern kitchen, surrounded by fresh ingredients

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The comfort of home cooking has become more appealing, a shift likely cemented during the long months of lockdowns.

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A Local Favorite Folds

Gusto Pizza, a beloved Des Moines eatery for almost ten years, recently closed its doors.

Overhead view of a table with two large pizzas topped with fresh basil and cheese, accompanied by red drinks and water glasses

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This beloved spot’s shutdown marks a significant loss for the community and reflects wider industry struggles.

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Rising Operational Costs

Jessica Dunker, CEO of the Iowa Restaurant Association, sheds light on the financial hardships facing eateries, saying: “the cost of goods is up 30 percent and they are having to shell out higher wages to keep staff on.” 

A variety of Korean dishes including bibimbap, kimchi, and side dishes spread out on a wooden dining table

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These rising costs are pushing many to the brink.

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Loan Repayments Loom

Repaying loans taken during the pandemic is now a heavy burden for many restaurants. 

Close-up of a chef's hands arranging paper order tickets on a kitchen's order rack

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These debts were meant to be temporary lifelines, but as Jessica Dunker points out, the current low foot traffic makes repayment challenging.

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Uncertain Futures

“The future is uncertain for many small independent restaurants,” says Jessica Dunker. 

Interior of a restaurant with large windows showing a lush forest outside, diners seated at wooden tables under hanging paper lanterns

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She highlights a worrying trend not just in Iowa but nationally, as restaurants struggle to project their viability over the next decade.

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A Nationwide Downturn

Iowa’s restaurant woes are part of a national crisis.

A close-up of a gourmet burger with bacon and cheese on a whole grain bun, served with a side of golden fries and sauce

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From coast to coast, similar economic pressures are forcing numerous small, independent establishments to close their doors, reflecting a troubling trend across the industry.

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What Lies Ahead for Dining Out?

As the restaurant industry confronts these tough times, the future of dining out hangs in the balance.

People enjoying food and drinks at outdoor tables in front of a cafe with large windows, under a clear blue sky

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Navigating these challenges will be crucial for restaurateurs aiming to carve out a sustainable path in a rapidly changing economic environment.

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