District Restaurant News | Fall 2020

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The National Restaurant Association sent a letter to Congress and the Trump administration today, making the case for additional support to small businesses, including restaurants. The Association had put together a Blueprint for Recovery for the restaurant industry earlier this year, that included support from the federal government. Now, updated analysis shows that nearly 100,000 restaurants are closed currently, and suggests that a majority of these could close permanently by year’s end. The situation for restaurants has become dire. A new survey by the Association found that sales at restaurants were down 34 percent on average. In addition, the restaurant industry as a whole could lose $240B in sales in 2020 (from 2019 levels). This aligns with an estimate from Technomic, which indicates the overall foodservice industry, including B&I contract foodservice, travel and education, could lose $250B to $300B under its Middle Case scenario. (Note: Technomic’s base of sales exceeds that of the Association by more than $60B). The analysis conducted by the Association shows that restaurants lost about $165B in revenue from March, when lockdowns began, to July. That deficit could increase by another $75B by year’s end. By that time, about 17 percent of restaurants could potentially close permanently. This projection presents a more grim outlook than the 13 percent closure forecast for 2020 by Foodservice Results. The Association also notes that restaurants are staffing at only about 71 percent of prepandemic levels. What’s more, with sharp deficits in sales, operators are finding it harder to manage margins, and 60 percent of them say their total operational costs are higher than before the COVID-19 crisis. “This survey reminds us that independent owners and small franchisees don’t have time on their side,” said Sean Kennedy, executive vice president of Public Affairs for the Association. “The ongoing disruptions and uncertainty make it impossible for these owners to plan for next week, much less next year.” 38 District Restaurant News

Congressional action urged as 17 percent of restaurants expected to close. Photo by Todd Trapani.

The Washington-based advocacy group also revealed that 40 percent of restaurant operators consider it unlikely they will be in business six months from now. As legislators leave for the elections season, the National Restaurant Association requested bipartisan support for small business. It asked Congress to consider stand-alone bills before its recess, so that restaurants can access immediate relief. In an effort to spike consumer interest, the Association recently launched Restaurant Revival, a marketing campaign to promote dining out at restaurants. This effort was somewhat blunted by a recent study from the CDC, suggesting a link between dining out and a higher risk for contracting COVID-19.