More than 500,000 restaurants are in free fall

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Economic free fall

The National Restaurant Association reports that 110,000 restaurants have closed permanently during the COVID-19 pandemic.

Since the start of the COVID-19 pandemic in March, 17% of restaurants (or about 110,000 establishments) have closed permanently or long-term, and 10,000 restaurants have closed in the past three months alone, according to data from December of the National Restaurant Association published. Monday.

Letter to Congress

The National Restaurant Association sent a letter to Congress, including Speaker of the House of Representatives Nancy Pelosi, Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, and Senate Minority Leader Kevin McCarthy Room.

Letter details

  • 87% of full-service restaurants (independent, chains and franchisees) report an average 36% drop in sales revenue. For an industry with an average profit margin of 5% to 6%, this is simply unsustainable.
  • 59% of operators report that their total labor costs (as a percentage of sales) are higher than they were before the pandemic.
  • We expect that to date 17% of restaurants – over 110,000 establishments – are completely closed.
  • The vast majority of permanently closed restaurants were 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 restaurateurs say they are likely to remain in the industry in some form in the months or years to come.
  • What these results clearly show is that more than 500,000 restaurants of all types of businesses – franchisees, chains and independents – are experiencing unprecedented economic decline.

Congress feuds since September

The letter includes a wishlist of priorities for the next pandemic package.

This plea was sent to Congress as restaurants speak out in various parts of the country where restaurant restrictions have become more stringent as cases continue to rise, including in California, where Gov. Gavin Newsom stayed for three weeks. – home ordering (including the closure of outdoor meals) for certain 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, Democrats demanded more than $ 3 trillion.

The quarrels continue.

Final package details

Politico reports that the bipartisan coalition is releasing details of the $ 908 billion coronavirus package.

  1. Unemployment: Expanding Federal Unemployment Benefits at $ 300 per week for 16 weeks.
  2. Paycheque protection: 300 billion dollars to the Small Business Administration to finance Paycheque Protection Program
  3. Rental assistance: $ 25 billion in rental assistance to states and local governments and extend a deportation moratorium until the end of January 2021.
  4. Child care: 10 billion dollars to support child care providers
  5. Education: 82 billion dollars for education providers
  6. Vaccines: More money for tests and vaccines.

Missing in action

  • Relief for restaurateurs and other business owners whose businesses have been closed by government order.
  • The plan doesn’t include direct stimulus checks to Americans, which makes sense. Josh Hawley (R-Mo.) And Bernie Sanders (I-Vt.) Endorse and have the support of President Donald Trump.

What about restaurants, hotels, lounges?

None of the above details or the $ 600 checks offered by Trump will do anything for the restaurant industry or any other business harmed by forced shutdowns.

Is it a responsibility of states since they forced the closures?

If so, the same can be said of the entire bailout package.

Mish

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