July was the second lowest month for rent delinquencies this year for independent restaurant operators.
New data from Alignable shows that 36% of independent restaurant operators couldn’t pay their rent in July, a material improvement from 45% who reported delinquencies in June.
Julye was the second lowest month for rent delinquencies in the independent restaurant sector this year, behind March, which was at 34%. May’s delinquencies were 44%, April’s were 49%, February’s were 40% and January’s were 38%. Rent delinquencies for the sector were a staggering 52% in December, Illustrating the past six months have been all over the map for independent operators, who continue to grapple with higher rent prices overall, as well as higher interest rates and slowing traffic.
Related Report: 63% of independent restaurants paying more for rent versus January
Alignable’s data shows that 55% of SMB owners are facing rent increases. Of those 55%, 15% are contending with rent that’s at least 20% higher than it was at the beginning of 2023. Further, the Federal Reserve once again raised interest rates last week, inching up a quarter-percentage point to as high as 5.50%, or the highest level in 22 years. Simultaneously, some inflationary pressures continue to challenge operators, including beef, paper and labor costs. And, according to Revenue Management Solutions, quick-service traffic declined by nearly 2% in Q2.
That said, the restaurant space slightly outperformed many of its small business peers. Overall, the national average for small business owners who couldn’t pay rent in July was 27%.