A new survey from the Restaurant Association Metropolitan Washington finds that 44% 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.
Among 200 eateries the trade group surveyed in January and February, 11% described closing as “very likely” and 33% as “somewhat likely,” while 62% reported lower profits in 2024.
Destination D.C., the city’s tourism bureau, estimates the District has 2,513 restaurants among thousands in the Maryland and Virginia suburbs.
More than half of surveyed restaurants expected conditions to worsen in 2025, up from 21% who felt the same at the start of 2024. Another 49% reported seeing fewer diners in 2024, up 20% from the year before as higher prices led more people to eat at home.
“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.”
Restaurants named inflation the top factor driving decreased diner spending, visits and tipping. Among survey participants, 91% expressed concern about diners’ willingness to pay higher prices and 77% cited mounting credit card swipe fees.
Another 82% worried how Trump administration tariffs on imported goods will increase food, beverage, and equipment costs; 73% anticipated negative effects from federal layoffs and relocations; and 68% questioned how immigration policies will affect their ability to maintain sufficient staffing.
The findings come 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 locations 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. Restaurants also said workers earned less and clocked fewer hours than in previous years.
The survey released Wednesday found that 32% of restaurants said diners are selecting less expensive restaurants, 31% said they are ordering fewer dishes per visit and 24% said they are skipping alcoholic drinks.
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 year 2029.
Reached Thursday for comment, some local stakeholders said that while more lunchtime commuters have returned to the office under the Trump administration, rising labor and food costs continue to put upward pressure on menu prices.
“We are seeing more people dining during lunch as the likely result of more back in office policies,” said Shelley S. Hymes, a local publicist who reviews D.C. restaurants on the “LUNCH! with Shelley” podcast. “However, from our restaurant owner and chef friends, the concerns over inflationary pricing and labor issues are real, and track with the survey.”
She expressed hope that “a stronger economy along with meaningful policy changes” could turn things around in upcoming months.
One restaurant owner who asked to remain anonymous said he closed one location in Northeast Washington after pandemic stimulus funding from the Biden administration failed to rescue it and may close more locations this year if any see two “bad months in a row.”’
“The struggle is real,” he said. “Dealing with reduced sales, increased product cost or increased labor cost on their own makes life challenging. Dealing with all three at once is a death knell for a lot of businesses.”
According to the restaurant association’s survey, “the situation is particularly severe for neighborhood full-service restaurants that have long defined DC’s dining culture.”
“We’re very close to selling or closing our DC locations – an extremely unfortunate situation given that our group has operated in DC for so many years,” an anonymous restaurant owner said in the survey. “Overall, we’re no longer profitable and are exploring other states to open in.”
Mr. Townsend, the restaurant association’s head, urged elected officials “throughout the region to seriously consider meaningful ways to support the restaurant community.”
According to his association’s forecast, July’s 20% increase in the D.C. tipped wage could cut job industry growth by 2% and lead 100 restaurants — 50% of the survey sample — to close.
“Without meaningful action, we risk permanently altering Washington’s distinctive dining landscape and losing the independent restaurants that make our region a world-class dining destination,” he said in an email.
