There’s no end in sight.
The government shutdown is creeping into its second week, and everyone is feeling the heat, not least of which, restaurant owners and operators.
And this is hardly the first roadblock D.C’s restaurant market has hurdled this year.
How is the government shutdown impacting the food scene in our nation’s capital, and how can restaurants weather the storm?
The Numbers Don’t Lie (But We Wish They Did)
TLDR, restaurants in D.C are struggling.
44% of full-service casual restaurants in Washington D.C. reported that shutting their doors was “very” or “somewhat likely” in 2025, according to a Restaurant Association Metropolitan Washington survey.
In fact, survey data shows 71% of D.C. restaurants reported sales drops, with nearly three-quarters seeing a decline in diners compared to last year.
Restaurants typically have about 13 days of cash on hand, and those reserves are already down this year after a slower-than-average summer. When your industry operates on thin margins and your customers suddenly lose paychecks—even temporarily—those 13 days shrink fast.
This isn’t just about federal workers brown-bagging lunch. Mass federal layoffs—or fear of them—mean diners are tighter with their spending, tourism is down, and many businesses are just climbing out of an August slump.
The Anatomy of Restaurant Pain
Multi-location operators—the backbone of D.C.’s restaurant scene—are feeling this acutely.
These aren’t corporate chains with deep pockets and hedge fund backing; we’re talking about local entrepreneurs who’ve built 2-4 location empires through grit and borrowed money.
Reverie’s Johnny Spero, whose Georgetown fine dining restaurant reopened in 2024 after a devastating fire, reflected that the last few weeks have been the most difficult times for his restaurants, “if you don’t take into account COVID.” When a chef who survived a literal fire and a global pandemic calls current conditions the worst he’s seen, we should listen.
Matt Hetrick, a CPA whose tax-and-accounting firm works with nearly 150 area restaurants, says his “watch list” of clients in dire financial straits has quadrupled from this time last year.
These are established businesses, not fly-by-night ventures—and they’re hanging on by a thread.
Beyond the Beltway
The ripple effect extends far beyond downtown D.C.
And this makes sense.
During a government shutdown, federal workers don’t get paid. Without a paycheck, discretionary spending evaporates—and restaurants are one of the first expenses on the chopping block.
Consider the suburban restaurant owner whose lunch rush depends on defense contractors, the Arlington bistro that relies on State Department employees’ expense accounts, or the Bethesda gastropub where federal consultants hold client dinners. When those paychecks stop, the spending stops—and unlike furloughed workers, restaurant owners don’t get back pay when normalcy returns.
The U.S. travel industry alone risks losing about $1 billion each week a shutdown continues due to disruptions in air travel, park and museum closures, and reduced visitor spending. That’s money not being spent at D.C.’s restaurants, hotels, and entertainment venues.
Financial Lifelines for Weathering the Storm
Smart restaurant operators are already implementing emergency measures. Here’s what we’re seeing work:
- Cash Flow Management: Restaurant owners should immediately review their cash reserves and extend payment terms with vendors where possible. This isn’t the time for pride—call your suppliers, explain the situation, and negotiate extended terms.
- Labor Cost Controls: Many restaurants are holding off on new hires and reducing hours for existing staff.
- Revenue Diversification: The restaurants thriving are those with takeout operations, catering arms, or retail components that don’t depend on the downtown lunch crowd. Now’s the time to pivot to delivery platforms or corporate catering for the private sector companies still operating.
- Strategic Partnerships: Some restaurants are finding opportunity in crisis—with thousands of qualified former federal workers seeking employment, there’s actually a talent pool available for establishments looking to upgrade their service or management.
- Tax Strategy Optimization: This is where specialized restaurant accounting becomes crucial. Federal tax credits, state incentives, and industry-specific deductions can provide critical breathing room. A restaurant CPA who understands the nuances of inventory accounting, tip reporting, and Section 199A deductions can mean the difference between survival and closure.
The government shutdown isn’t just a policy inconvenience—it’s an existential threat to a restaurant industry already operating in crisis mode. The operators who survive will be those who understand their numbers, manage their cash flow religiously, and make the hard decisions before they’re forced to make them.
For restaurant owners navigating these precarious waters, having a financial partner who truly understands the industry isn’t a luxury—it’s a necessity. Because when the stakes are this high, generic accounting advice won’t cut it.
