Chairman of O'Leary Ventures and Shark tank STAR Kevin O'Leary has recently weighed in on the issues that inflation has presented in certain US markets, particularly as it applies to potential homeowners and renters in the housing market.
Now, O'Leary is offering his insights on why he believes inflation is to blame for the collapse of another American market: the restaurant industry.
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In an op-ed for Daily Mail, Shark tank The star referred to inflation as a “virus” and complained that “rapid random reckoning” has been brought about by pandemic-related consequences, including rising prices and a shift in traditional work environments.
“Supply chains crippled by the lockdown of the Covid pandemic have not recovered. Food costs – particularly for proteins such as chicken, beef and seafood – have risen 30 to 40 percent over the past 36 months,” he noted. “Worst of all for the restaurant industry — customers haven't returned from the closures.”
O'Leary noted that many Americans have maintained a hybrid or completely remote work model in a post-pandemic world, resulting in less traffic inside restaurants during the day.
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“This has been devastating for businesses that have invested in brick-and-mortar locations. Restaurants in urban locations have been hit particularly hard as their expensive locations are no longer getting what they need to cover rent,” O'Leary wrote. “Some businesses will have to go bankrupt, completely reorganize and move to less expensive areas.”
Take red lobster, which began to close dozens of locations and auctioning equipment last month before declaring Chapter 11 bankruptcy just days later.
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In O'Leary's view, Red Lobster's downfall could be just one of many in the near future.
“Inflation is devastating to middle-income earners,” he warned. “Unfortunately, it is unknown when – if ever – these prizes will return to Earth.”