Half of NYC Restaurants and Bars Broke Even or Lost Money Last Quarter. What Operators Can Do Before the Holiday Rush

NEW YORK — The summer bump didn’t last. After a strong spring and early summer fueled by World Cup crowds and Knicks playoff watchers, New York City’s bars and restaurants had a rough third quarter, according to a new survey from the NYC Hospitality Alliance, the trade group that represents more than 3,000 of the city’s restaurants.

Of the 275 establishments that answered the alliance’s quarterly survey, half said they broke even or operated at a loss from July 1 to Sept. 30, Gothamist reported. About as many said sales came in below expectations.

What the Survey Found

The headline numbers, as reported by Gothamist and PIX11:

• 50% broke even or lost money in the third quarter.
• 61% have raised menu prices or are considering it.
• 57% have cut, or are considering cutting, staff or employee hours.
• 36% have delayed, or are considering delaying, payments or investments.
• 45% named labor costs as a leading concern. Inflation and tariffs, liability insurance and commercial rent also ranked high.

Respondents came from all five boroughs, PIX11 reported. The survey is a snapshot of the businesses that chose to answer, not a random sample of every restaurant in the city, so it’s best read as a signal of direction rather than an exact measure.

“These big events gave a lot of small businesses a big boost,” Andrew Rigie, the alliance’s executive director, told Gothamist, referring to the second quarter. “Unfortunately, it seems that it was short-lived.”

Rigie also told PIX11 that the city’s restaurants and bars have lost more than 15,000 jobs over the past year.

The Price Trap

The most useful part of Rigie’s comments for operators is his description of why raising prices doesn’t fix the problem on its own. “When you start to increase menu prices, you can deter customers from coming to the restaurant and spending money,” he told Gothamist. “Often, they will order differently. They’ll order less. So even some restaurants that have experienced increased overall sales, they’ve reported decreased profitability.”

That pattern has been building for months. In October, Bloomberg reported that some city restaurants were taking unusual steps to cut costs, including an East Harlem burger spot that turned off its air conditioning after its gas and electric bill hit $1,400 a month, and a restaurant group that closes some locations on Sundays.

Rigie told PIX11 the industry is hoping for a pickup in the fourth quarter, which includes the holiday tourist season.

A Fourth-Quarter Checklist for Operators

None of this is financial advice, and every restaurant’s numbers are different. But the survey points to a few steps worth taking now, before December’s volume arrives.

Know your break-even by day of week. If half the industry is at or below break-even, the question isn’t just whether you made money last quarter, it’s which days and dayparts lost it. Pull your point-of-sale reports by day and hour, and compare them against labor scheduled for those shifts. Some operators may find that closing or shortening one slow shift does more than another price increase.

Raise prices surgically, not across the board. If customers respond to higher prices by ordering less, a menu-wide increase can backfire. Look at which dishes carry the highest food cost and which ones customers order regardless of price, and adjust those first.

Watch the check, not just the traffic. Rigie’s point that some restaurants saw higher sales but lower profits is a reminder to track average check size, items per table and drink attachment rates. A full room that orders one entrée and tap water is a different business than the same room in 2024.

Book holiday groups now. Private parties and prix fixe group menus bring predictable revenue and let you plan purchasing and staffing in advance. Promote buyouts this week, not after Thanksgiving.

Get your insurance and rent questions in front of an expert. Liability insurance and commercial rent were both top concerns in the survey. Ask your broker to re-shop your policy before renewal, and if your lease is coming up, talk to a commercial real estate attorney or broker about your options before your landlord sends terms.

Use the free city help. The city’s Department of Small Business Services offers free help with financing, hiring and regulations. We’ve also covered NYC BEST, the city’s small-business advocate team, and a $5,000 disaster-resilience grant whose application window closes Nov. 15.

The Bigger Picture

Rigie told Gothamist that the city’s affordability crisis is a restaurant problem too, because when New Yorkers have less money to spend, they spend less of it eating out. He said policymakers need to step in on costs like labor and goods. Whether the new city administration takes up any of the alliance’s asks is a story we’ll keep watching.

For now, the fourth quarter is the season that has to carry a lot of businesses into the new year. Operators who use the next few weeks to tighten their numbers will be in a better position to keep more of what December brings in.

Entrepreneurs Of New York is an independent publication and is not affiliated with the NYC Hospitality Alliance.