Few businesses that have been hit harder this year than restaurants. While some were able to survive on takeout alone and others have since reopened with fewer tables, many didn’t survive. And the pain for this industry is far from over, even for the restaurants that managed to stay afloat, it’s been a continuous struggle.
CNBC’s Jim Cramer recently called it “the restaurant apocalypse” saying, “If you’re in the business of serving people food in a brick-and-mortar setting, all I can say is stick a fork in it, because that business is done.”
The Beard Foundation announced Thursday that “Three in five restaurants need additional funding for fixed costs and payroll to fully re-open and stay open.” Now the industry is hoping for a lifeline and fast. This week the Independent Restaurant Coalition (IRC) released a new TV ad calling on Congress to pass the RESTAURANTS Act. RESTAURANTS stands for “Real Economic Support that Acknowledges Unique Restaurant Assistance Needed to Survive.” The bill, which has bipartisan support would reportedly provide $120 billion dollars in grants for small restaurant owners cover specified costs.
Newsday writes:
The bill defines independent restaurants as “food service or drinking establishments, including caterers, that are not publicly traded or part of a chain with 20 or more locations doing business under the same name. “ For the first two weeks, funds would only be made available to restaurants with annual revenues of $1.5 million or less.
The amounts of the individual grants would be the difference between a business’s 2019 revenues and its projected 2020 revenues, excluding any Paycheck Protection Program loan funds that were not paid back.
The ad calling for action is narrated by Morgan Freeman and backed by some of the biggest names in the restaurant business. Andrew Zimmern, who helped produce the ad says, “Without federal aid, the pandemic threatens to permanently close 85% of independent restaurants. 16M people risk losing their jobs.”
The IRC adds:
A new analysis from restaurant consultants Aaron Allen & Associates predicts one in three U.S. restaurants may close permanently this year. More than 1 in 4 workers who have lost their jobs during the pandemic are from the restaurant industry, more than any other industry. Last week, the Department of Commerce reported that restaurants lost over 34% of revenue in Q2 of this year.
And for some communities, the outlook may be even grimmer. KRDO, a radio station in Colorado Springs cites a recent survey conducted by the Colorado Restaurant Association that finds, “Of the restaurants that responded to the survey, 62% said they will consider closing permanently in the next six months under the current conditions.”
Bennie’s Thai Cafe in NYC’s Lower Manhattan is one of the casualties. The restaurant closed for good on July 26th, exactly 24 years after it opened. The owner, Bennie Boon said, “We made it through the dark days of 9/11, the recession and Superstorm Sandy, but the Covid-19 pandemic was just too much for us to undertake.” She said the rent was just too high to sustain through the pandemic and without any break from her landlord, it was time to pack it in.
And it isn’t just independent restaurants suffering, today Restaurant Brands International said it expects to close hundreds of its Burger King, Tim Hortons and Popeyes locations. It’s basically hitting every corner of the industry.
