Chairman and CEO of O’Leary Ventures Shark Tank The Star’s Kevin O’Leary recently weighed in on the problems inflation is having on potential homeowners and renters in certain markets across the U.S., particularly the housing market.
Now, O’Leary is sharing his thoughts on why he believes inflation is to blame for the collapse of another American market: the restaurant industry.
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In an editorial Daily Mail, Shark Tank The Star called inflation a “virus” and lamented that pandemic-related fallout, including rising prices and changes to traditional work environments, has led to a “fast-casual liquidation.”
“Supply chains crippled by the COVID-19 pandemic lockdowns have never recovered, and food prices, especially proteins like chicken, beef and seafood, have risen 30-40% over the past 36 months,” he said. “The worst part for the restaurant industry is that customers have not returned since the shutdowns.”
O’Leary noted that in a post-pandemic world, many Americans will maintain hybrid or fully remote work arrangements, resulting in fewer daytime customers at restaurants.
RELATED: Red Lobster speaks out about ‘misunderstood’ bankruptcy filing
“This has been a devastating blow to businesses that have invested in brick-and-mortar locations, with urban restaurants being hit especially hard as they can no longer attract the foot traffic necessary to justify rents in expensive storefronts,” O’Leary wrote. “Some will have to go bankrupt, completely restructure, or relocate to cheaper areas.”
Take Red Lobster, for example: The chain filed for Chapter 11 bankruptcy protection days after closing dozens of locations and beginning to auction off equipment last month.
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In O’Leary’s opinion, Red Lobster’s downfall may just be one of many to come in the near future.
“Inflation will be devastating for average income earners,” he warned. “Unfortunately, we don’t know when, or if, prices will ever bounce back.”
