Shark Tank star Kevin O’Leary reveals why restaurants across America are closing and warns that MORE closures are coming

The American restaurant industry was on the menu.

Seemingly every day there is a headline announcing bankruptcy, layoffs or store closures affecting one of the country’s most beloved brands.

Last month, Red Lobster filed for Chapter 11 after closing nearly 100 stores. Over the past year, the stock value of Cracker Barrel, which operates restaurants in 45 states, has plummeted. The once booming Boston Market chain, which had 1,200 locations in the 1990s, is now reportedly down to twenty stores.

So what’s behind this quick settlement?

This is proof that the inflation virus continues to infect America’s post-pandemic economy.

Supply chains paralyzed by the Covid-19 lockdown have never recovered. Food costs – especially proteins such as chicken, beef and seafood – have increased 30 to 40 percent over the past 36 months. The worst for the restaurant industry – customers did not return from the downtime.

Business closures and social distancing mandates have forced people to change the way they eat. Sixty million Americans – a huge portion of the population aged 60 and over – were forced to turn to their smartphones to order dine-in for the first time in 2020.

But now these consumers have no problem ordering Chinese dishes from their living room couches.

And while Americans rarely worked from home before the pandemic, an estimated 22 million employed adults (about 14 percent of the workforce) have not returned to the office, according to the Pew Research Center.

This means fewer people go out for lunch or meet colleagues for dinner after work.

This was devastating for companies that invested in brick-and-mortar locations. Restaurants in urban locations have been hit particularly hard as their expensive locations no longer attract the traffic needed to cover rent costs.

To survive, many of them had to transform into commercial kitchens specializing only in takeaways.

Some companies will have to go bankrupt, completely reorganize and move to cheaper areas.

But nothing can be done if consumers simply refuse to spend.

Overall, wages are not keeping pace with inflation and Americans are looking for cheaper alternatives.

Even the exclusive chain of regular burgers, BurgerFi, is now struggling to survive and is considering bankruptcy options in the face of a drastic decline in sales.

In this economy, an “upscale McDonald’s” is a luxury that many cannot afford.

Inflation is devastating for middle-income earners (those earning $68,000 a year), with already tight budgets and increases in transportation, housing and energy costs.

Unfortunately, there is no telling when – if ever – these prices will return to Earth.

Red Lobster suffered a triple blow to its business. Volatile seafood prices and expensive real estate were probably bad enough. But California’s disastrous new regulations may have proved too much for the chain, which has multiple locations on the West Coast.

Indeed, the restaurant industry’s struggles are most visible in deep blue California, where Democratic Gov. Gavin Newsom has turned a not-so-golden state into the closest U.S. facsimile to Venezuela.

Newsom signed a bill in September raising the minimum wage for fast food workers from $16 an hour to $20, making the decades-old companies unprofitable overnight.

One California trade group estimated that the Maduro-style edict led to the layoff of nearly 10,000 workers before the law took effect on April 1.

A West Coast Burger King franchisee that operates 140 restaurants announced it will replace employees with digital order-taking kiosks. Major operator Pizza Hut eliminated delivery services and laid off thousands of drivers.

Now, just 90 days after the new system was introduced, companies are falling like flies.

Earlier this month, beloved Mexican chain Rubio’s Coastal Grill announced it was closing 48 restaurants in the state due to “rising costs of doing business.”

Blaze Pizza is closing its California locations and moving its headquarters from Pasadena to Atlanta in a bid to cut the state’s corporate tax rate by more than a third.

Newsom’s far-left government is completely out of touch with the realities of inflation, and the governor has the blood of these failed companies on his hands.

This all adds up to terrible news for the American economy.

While major chains Red Lobster and Burger Fi are making headlines, restaurants across the country are struggling with the same problems.

An astonishing 62 percent of jobs in this country are created by companies with between 5 and 500 employees. However, during the pandemic, President Biden has focused solely on supporting S&P 500 companies with massive stimulus packages.

Consider the Inflation Control Act and the Chips and Science Act, which are estimated to cost $1 trillion and $80 billion, respectively. Neither bill included a penny for small businesses.

Just as President Biden is desperately trying to convince Americans that “Bidenomics works.”

This is not.

Seated on a rickety podium, Biden explains that he is rebuilding the economy from the bottom up.

This evidence suggests otherwise.