More Than 500,000 Restaurants are in Freefall
The National Restaurant Association reports 110,000 Restaurants Have Closed Permanently during the COVID-19 pandemic.
Since the COVID-19 pandemic began in March, 17% of restaurants (or about 110,000 establishments) have closed either permanently or long-term, and 10,000 restaurants have closed over the last three months alone, according to the National Restaurant Association’s December data released on Monday.
Letter to Congress
The National Restaurant Association sent a Letter to Congress, including House Speaker Leaders Nancy Pelosi, Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, and House Minority Leader Kevin McCarthy.
- 87% of full service restaurants (independent, chain, and franchise) report an average 36% drop in sales revenue. For an industry with an average profit margin of 5%-6%, this is simply unsustainable.
- 59% of operators say their total labor costs (as a percentage of sales) are higher than they were pre-pandemic.
- We predict that as of today, 17% of restaurants—more than 110,000 establishments—are completely closed.
- The vast majority of permanently closed restaurants were well-established businesses, and fixtures in their communities. On average these restaurants had been in business for 16 years, and 16% had been open for at least 30 years.
- Only 48% of these former restaurant owners say it is likely they will remain in the industry in any form in the months or years ahead.
- What these findings make clear is that more than 500,000 restaurants of every business type— franchise, chain, and independent—are in an unprecedented economic decline.
Congressional Bickering Since September
The letter includes a wish list of priorities for the next pandemic package.
This plea was sent to Congress at the same time that restaurants are speaking out in various areas around the country where restrictions on restaurants have gotten more stringent as cases continue to rise, including in California, where Gov. Gavin Newsom passed a three-week stay-at-home order (including shutting down outdoor dining) for parts of the state.
On October 2, the House Passed a $2.2 Trillion Heroes Act that included $120 billion in relief for independent restaurants.
In September, the Democrats demanded over $3 trillion.
The bickering goes on an on.
Latest Package Details
Politico reports Bipartisan Coalition Releases Details of $908B Coronavirus Package.
- Unemployment: Expand federal unemployment benefits to $300 a week for 16 weeks.
- Paycheck Protection: $300 billion to the Small Business Administration to fund the Paycheck Protection Program
- Rental Assistance: $25 billion in rental assistance to states and local governments and extend an eviction moratorium until the end of January 2021.
- Child Care: $10 billion to support child care providers
- Education: $82 billion for education providers
- Vaccines: More money for testing and vaccines.
Missing in Action
- Relief for restaurant and other business owners whose businesses were closed by state orders.
- The plan does not include direct stimulus checks to Americans, which Sens. Josh Hawley (R-Mo.) and Bernie Sanders (I-Vt.) are both endorsing and has the backing of President Donald Trump.
What About Restaurants, Hotels, Salons?
None of the above details nor Trump's proposed $600 checks will do anything for the restaurant industry nor any other business harmed by forced closures.
Is this a responsibility of states since they forced the shutdowns?
If so, the same can be said for the entire bailout package.