UC study: How recession, pandemic hit Cincinnati restaurants

But a new University of Cincinnati study found that challenges outside the owner’s control can make a dramatic difference in the success or failure of a new eatery.

UC College of Arts and Sciences student Hannah Dahlke examined 15 years of licenses for new independently-owned restaurants across Cincinnati’s 52 neighborhoods between 2008 and 2023.

Her Cincinnati restaurant closures study looked at how external shocks like the Great Recession and the COVID‑19 pandemic affected new and existing restaurants across the city’s 52 neighborhoods.

Dahlke found that: 

• Fewer than 8% of Cincinnati restaurants closed in their first year.
• About 60% of the restaurants that opened between 2008 and 2023 eventually closed.
• Cincinnati restaurant closures spiked twice during that period — in 2009 after the Great Recession and in 2022, two years after the global pandemic.
• At the neighborhood level, restaurant closures were correlated with higher restaurant density and higher crime rates.

“The restaurant business is not easy,” Dahlke said. “In the data, you can see how external events affected restaurants. They struggled after the recession and pandemic.”

Dahlke examined more than 10,000 city food service licenses. She removed food trucks; chain restaurants; hospitals, schools and other institutions; sports venues and private clubs, which left 2,231 independently owned restaurants. And over the 15 years, 1,346 of them eventually closed.

Dahlke presented her findings this spring at the American Association of Geographers conference. She is studying geography in UC Professor Robert South’s lab, focusing on how place, neighborhood characteristics and external events shape restaurant survival in Cincinnati.

“The spike in closures in 2009 and 2022 isn’t a surprise,” said John Barker, president and CEO of the Ohio Restaurant & Hospitality Alliance.

“Restaurants have one of the lowest profit margins of any industry. They don’t have much wiggle room. If you add an external event the magnitude of the recession or the pandemic, it puts weaker operators in peril,” he said.

Barker said the pandemic put a strain on restaurants that did not offer takeout or delivery. Others that had those services, or quickly began to offer them, persevered.

Meanwhile, ordering food deliveries has become commonplace for restaurant patrons, even after delivery services tack on fees.

“Restaurateurs are very tough. They persevere during ups and downs,” Barker said.

The first year of any new business is its most important. Dahlke said Cincinnati had a comparatively low rate of first-year restaurant closures compared to national studies.

“You have a population in Cincinnati where people support their restaurants and like to go out and eat,” she said. “So I can see that as a reason why those numbers are better than in other cities.”

She and her friends like to go out to eat, too. They try to patronize independently owned restaurants in the city.

The effects of the recession and the pandemic were not immediately reflected in the Cincinnati closure data. Dahlke said many businesses did what they could to retain their patrons. Closures jumped to 13% in 2009 and 11% in 2022.

“It took a bit for the effects to kick in. During the recession, businesses probably saw reduced sales but tried to keep going. And in the pandemic, some businesses adapted with takeaway and delivery services,” she said.

Eventually, the economic and health disasters were too devastating for some businesses, Dahlke said.

Restaurateurs have so many decisions to make, starting with where to open. Dahlke said a myriad of factors goes into that decision, from visibility to neighborhood walkability and crime data to parking, zoning and competition saturation.

“I think picking a location is really important. That’s a big decision. One advantage chain restaurants have is they can do the complex analyses required in picking an ideal location,” she said. “Independent restaurants have to figure that out themselves.”

Dahlke said the UC study demonstrates the challenges facing the restaurant industry. And she hopes that the numbers can help inform entrepreneurs about the potential risks.

“I think it’s always nice to see that your research is able to help people,” she said. “Especially within geography, a lot of our research has a human aspect to it. That’s always something I aim towards.”

Featured image at top: Hannah Dahlke is a doctoral student in UC's College of Arts and Sciences. Photo/Jenna Adkins-Manuel/UC Marketing + Brand