About 40% of casual dining restaurants in the D.C. area expect to close this year due to higher food costs, tipped wage increases and federal layoffs, according to a survey by the Restaurant Association Metropolitan Washington.
Of 200 eateries the trade group surveyed in January and February, 40% said they are likely to shutter and 62% reported lower profits in 2024.
More than half of surveyed restaurants expected conditions to worsen in 2025, up from 21% who felt the same at the start of 2024.
“The data illustrates multiple substantial burdens converging at once, threatening not just single businesses but potentially altering DC’s distinctive dining landscape,” said Shawn Townsend, president and CEO of the Restaurant Association of Metropolitan Washington. “Without meaningful intervention, we risk losing the independent restaurants that make Washington a world-class dining destination.”
The survey comes after scores of restaurants in the District closed or struggled to stay open during the Biden administration as many federal employees worked from home in Maryland and Virginia.
Last year, the District had its highest numbers of restaurant openings and closures as restaurants in the city struggled the most with declining profits.
In January, RAWM reported that D.C. full-service restaurant workers lost jobs nearly every month in 2024, with employment dropping 3% on average.
Tipped wages have increased nearly 50% in the District as part of a $2 annual increase that city officials have mandated through 2027. In July, the next hike will bump tipped wages from $10 to $12 an hour, costing the average restaurant $140,000 annually.
In addition to rising food and labor costs, federal layoffs have threatened to cut into restaurant profit margins.
D.C. Chief Financial Officer Glen Lee has estimated that a 21% reduction in the federal workforce would lead to a $342.1 million annual decline in the city’s revenue through fiscal 2029.
