CEDAR RAPIDS, Iowa (KCRG) – A national survey found that the restaurant industry saw a healthy jump in sales in 2023. But that didn’t help some places that were forced to close their doors in the past year. KCRG says MasterCard found that the retail sales grew over 3% this holiday season, and that includes restaurant industry sales. That same study found the Restaurant sector was up 7.8% year over year. So why are some places closing so soon?

Jessica Dunker with the Iowa Restaurant Association says the profits in the business still aren’t quite at the levels they were pre-pandemic. The establishment may look busy, she said, by when all is said and done, some restaurants simply aren’t profitable.

The reason for that can range from restaurant to restaurant, but it typically has to with increased prices to compensate for the cost of labor. And a huge part of that is tips. Dunker says servers and bartenders still depend on tips as a large part of their income.

She said also, one way to help with the overall success of the restaurant industry is to pay with cash. Dunker said, on average, these businesses will pay between 1.5 and 3 percent in card processing fees.