By Joséphine Li
For the beleaguered restaurant industry, the news of a vaccine that could bring an end to the Covid-19 pandemic is not coming fast enough. A great number of restaurants are on the verge of closing down.
According to research conducted by the National Restaurant Association, a whopping 17% of American restaurants have shuttered permanently or long-term since the pandemic began. That figure equals 110,000 restaurants across the country, ranging from local diners to upscale fine-dining spots. The association also estimates an additional 10,000 restaurants will join those ill-fated ranks and face closure in the next 3 weeks if no immediate action is taken.
The association released results from a survey of 6,000 restaurant operators, showing that 87% of full-service restaurants reported an average 36% drop in their revenue. That’s a staggering figure for an industry with a notoriously razor-thin 5% to 6% profit margin. 83% of respondents expect sales to be “even worse” over the next 3 months as the virus continues to lash the United States.
The stakes could not be higher as the virus’s recent surge grows even more intense — Restrictions on indoor dining capacity in some US states and other lockdowns stipulations, such as curfews, have wreaked havoc on the restaurant industry. A great number of national chains filed for bankruptcy in 2020, which has resulted in the closure of hundreds of locations.
“The restaurant industry simply cannot wait for relief any longer,” Executive Vice President Sean Kennedy said in a news release. Kennedy advocates for a true compromise between the competing Republican and Democrat proposals and he hopes for a larger stimulus package in 2021 under the incoming Biden administration.
A bipartisan stimulus proposal that includes an extension of the Paycheck Protection Program could be introduced this week. However, the hold-up over other issues means it is unclear if a deal will be reached.
The Democratic-controlled House passed another measure in October, the Restaurants Act of 2020, to protect the restaurant industry economy as part of a $2.2 trillion stimulus relief package. As of today, the act has not been taken up by the Republican-controlled Senate. It is unclear if the act will be part of any final relief package.
With no certainty of government support, the future remains uncertain. Only 48% of the former restaurant owners surveyed said they will remain in the field in the coming months or years at all. This figure could suggest a significant loss of talent and skilled labor that will be difficult to recover once the pandemic has run its course.
