A Restaurateur Still Waiting for Consumers to Come

Stakeholders cry out restaurants are in economic ‘free-fall’, seek government’s support

*The National Restaurants Association, based on a recent survey, has warned that the future is grim for eatery businesses, warning that consumers’ favourite eateries might not be there when things get back to normal

Emmanuel Akosile | ConsumerConnect

An industry group identified as the National Restaurants Association (NRA) has issued an urgent appeal to the US Congress for aid to restaurants that have been forced to close shop, or to sharply curtail operations following the outbreak of the novel Coronavirus (COVID-19) pandemic in the country.

The NRA, citing a survey the group recently completed, cautioned that the future is grim for these businesses, said agency report.

Sean Kennedy, Executive Vice-President for Public Affairs in a letter to the Congress, said: “What these findings make clear is that more than 500,000 restaurants of every business type—franchise, chain, and independent—are in an economic free fall.”

“And for every month that passes without a solution from Congress, thousands more restaurants will close their doors for good.”

The association had surveyed 6,000 restaurant operators and 250 businesses that support the industry in the country.

The United States Congress Building    Photo: Wikipedia

It found that 87 percent of full-service restaurants have experienced a 36 percent drop in sales revenue on average.

Report indicates that for an industry with an average profit margin of no more than 6 percent, the NRA cautions that these conditions are simply unsustainable.

Eighty-three percent of full-service operators expect sales to be even worse over the next three months.

Independent and franchise owners are feeling the most pain, according to report.

While sales are down, their costs are not. Fifty-nine percent of operators told the NRA that their total labour costs, as a percentage of sales, are higher than they were pre-pandemic.

While hope is on the horizon in the form of vaccines that will help the world get back to normal, the NRA warns that restaurants ─ including many local favourites across the country ─ probably won’t be there when the pandemic is a distant memory.

It was further learnt not only will that affect owners of these businesses, but the NRA says people who depend on them for employment will also feel the pain.

Fifty-eight percent of chain and independent full service operators expect continued furloughs and layoffs for at least the next three months.

Reeling off grim statistics in its appeal to the Congress for help, the NRA presented these grim statistics, that about 17 percent of restaurants ─ more than 110,000 establishments ─ are closed permanently or for the foreseeable future.

According to the association, the majority of permanently closed restaurants were well-established businesses that were fixtures in their communities.

On average, these restaurants had been in business for 16 years, and 16 percent of them had been open for at least 30 years.

It noted that only 48 percent of these former restaurant owners say it is likely they will remain in the industry in any form in the months or years ahead.

Meanwhile, the Congress has debated additional aid to businesses and individuals for months because lawmakers have been unable to get past two key sticking points.

While Democrats have insisted on additional money for state and local governments, and Republicans have refused.

Similarly, Republicans have insisted on protecting businesses from lawsuits by people who get sick, and Democrats have refused.

Yet, vulnerable individuals, organisations and businesses continue to suffer amid the spikes in COVID-19 cases in the United States.

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