The D.C. area’s restaurant community is warning of closures as economic pressures and federal actions raise fears of less spending and higher costs.
Impacts may be less severe in Arlington and Falls Church than in D.C., as some businesses are considering leaving the District for “better deals” in Northern Virginia. However, Shawn Townsend, president of the Restaurant Association Metropolitan Washington (RAMW), cautioned that Arlington restaurants remain vulnerable to issues involving federal job cuts, rising costs and a possible meals tax increase.
“I just caution our electeds: don’t strain our restaurant community even more, because you will look up and you will have more closures than openings at the blink of an eye,” he told ARLnow.
An RAMW survey released this week found that 44% of “full-service casual restaurants” in the region say they are “somewhat likely” or “very likely” to close this year.
The survey of 217 restaurants found that 49% of restaurant owners saw fewer diners last year and 47% experienced lower sales, continuing trends from 2023. Additionally, 91% raised concerns about diners’ price fatigue as costs of some staple ingredients — like eggs — are on the rise.
In responses between Jan. 24 and Feb. 11, restaurant owners also raised fears about the likely impacts of tariffs and federal layoffs, as well as changes in immigration policy, which affect many people employed in the region’s food industry.
Townsend told ARLnow that he knows of one family who recently moved back to El Salvador over immigration fears, leaving two unfilled positions in a restaurant after 15 years working there.
“Our District’s full-service restaurants — the gathering places that define neighborhoods and create the cultural fabric of our city — are facing a historic combination of pressures,” he said in the report. “The data illustrates multiple substantial burdens converging at once, threatening not just a single business but potentially altering D.C.’s distinctive dining landscape.”
Townsend clarified that trends might be slightly different in Northern Virginia, which is home to many teleworkers who, these days, visit fewer restaurants in D.C. and more in their local communities.
On the whole, however, Arlington Chamber of Commerce President Kate Bates told ARLnow that Arlington faces many of the same challenges that D.C. does.
“We continue to hear from our restaurant members about the significant challenges they are facing, many of which are reflected in the Restaurant Association of Metropolitan Washington survey results,” Bates said. “Ongoing labor shortages, supply chain disruptions, rising costs of staple ingredients, and inflation-driven shifts in customer spending habits are all putting pressure on local restaurants.”
Both Bates and Townsend raised concerns about a proposal to increase Arlington’s meals tax from 4% to 5%, projected to bring in an additional $13.3 million. They argued that this would only worsen existing vulnerabilities.
“As noted in the survey, inflation is already impacting customer spending, and raising the meals tax could further discourage dining out in Arlington,” Bates argued. “This not only places additional strain on restaurants but could also have unintended consequences for County tax revenues if fewer people choose to dine out or spend less per meal.”
Arlington County’s current meals tax rate last changed in 1991. As the Trump administration creates an unusual amount of economic uncertainty in the D.C. area this year, members of the Arlington County Board have argued that a tax increase could help preserve services to the county’s most vulnerable residents.
Overall, Townsend portrayed the D.C. restaurant scene as one still recovering from the impacts of the pandemic and beset by a new wave of challenges.
“The industry is in a very delicate place right now,” he said. “We are out of the pandemic — that’s clear. But as one of the first industries to close and one of the last industries to open … it has taken us longer to recover, and we still see the remnants of the pandemic in this industry.”
Townsend urged leaders to bear this in mind as they make decisions this budget season.
“Municipalities need to be very sensitive and cautious around how they implement new policies and legislation that could potentially impact restaurants even more in a negative way right now,” he said. “I just caution electeds to really consider providing more support and relief to restaurants, and think more long term about restaurants being an economic driver.”
ARLnow reporter Katie Taranto contributed to this story.
