Restaurants still vulnerable, association tells Congress

U.S. restaurants continue to be susceptible to failure and need federal help, the National Restaurant Association told Congress in a March 2 letter.

The group said the continued vulnerability for the nation’s second-largest private sector employer warrants prompt passage of the $25 billion Restaurant Revitalization Fund in the American Rescue Plan. 

“The Restaurant Revitalization Fund represents the culmination of a year’s worth of advocacy and development toward an industry-specific solution,” Sean Kennedy, executive vice president of public affairs for the National Restaurant Association, said in the a news release. “Prompt passage and implementation will provide new relief opportunities for some of the nation’s hardest-hit restaurants and communities. Help for restaurants is help for employees and communities, and a signal that our country is one step closer to turning a corner.”

The release said a survey of operators found: 

• Consumer spending in restaurants remained well below pre-pandemic levels in January. Overall, 77% of restaurant operators say their total dollar sales volume in January was lower than it was in January 2020;
• From November 2020 to January 2021, nearly 450,000 restaurant jobs were lost, representing about 10% of the total jobs recovered during the first six months after the spring shutdowns. Eighty percent of operators say their current staffing level is lower than what it would normally be in the absence of COVID-19;
• Most restaurant operators do not expect a return to normal business conditions any time soon, according to the release. Thirty-two percent of operators think it will be 7-12 months before business conditions return to normal for their restaurant, while 29% think it will be more than a year. An additional 10% of operators say business conditions will never return to normal for their restaurant.
• Fourteen percent of restaurant operators say they will ‘probably’ or ‘definitely’ be closed within 3 months if there are no additional relief packages from the federal government.

The release said while many other industries have moved into a recovery phase, the restaurant industry ended last year in a double-dip recession and with 2.5 million fewer jobs. Between March 2020 and January 2021, restaurant and foodservice sales were down $255 billion from expected levels.

“Demand for relief will far outpace the $25 billion in funding,” Kennedy said in the letter. “But this is an incredible step forward and we look forward to working with you to see this program launch successfully to rescue countless industry jobs nationwide.”