With no added support, 40% of surveyed operators expect they will be unlikely to be in business 6 months from now
The uncertain economic recovery for restaurants in the wake of the COVID-19 pandemic has slowed in recent months, posing more hurdles for operators.
In September, 32 states reported losses in restaurant jobs, and industry employment remained about 2.3 million positions below pre-COVID-19 pandemic levels.
“It’s been a very challenging environment,” said Tom Bené, president and CEO of the National Restaurant Association and CEO of the National Restaurant Association Educational Foundation since June 1, during a “The State of the Industry” session, sponsored by Del Monte Foods Inc., at Restaurants Rise powered by MUFSO.
After a growing number of openings during the summer months as cities and states eased coronavirus restrictions, the fall started to see closures again.
“A recent survey found that 40% of operators are unlikely to be in business six months from now if there is not additional support,” Bené, left, said, adding that the association has been polling restaurant owners nearly monthly since the coronavirus pandemic was declared in March.
“We need to do everything we can to not only keep these restaurants healthy and profitable but also open,” he said, adding that the federal government needed to consider more help beyond the initial Paycheck Protection Program and other initiatives enacted immediately after the pandemic was declared.
About 75% of full-service restaurants have been taking advantage of outdoor dining, accounting for about 44% of sales exclusive of take-out and delivery, but that will be challenged as northern-tier states move into the cold weather of fall, Bené said.
Holidays, often a lucrative season for restaurateurs will be difficult for operators this year, especially as local jurisdictions are imposing new restrictions on dine-in capacity as COVID-19 cases surge.
The impact of the pandemic could total $40 billion in lost sales just in the final two months of the year, Bené noted.
“We have started to see an acknowledgement by some of the public health officials that COVID is not necessary spread in restaurants,” Bené noted. “In fact, they’ve talked a lot more about family gatherings and other types of activities that are having a bigger impact on the increased transmission of cases.”
Bené said the National Restaurant Association works to focus on the entire industry, despite some segments — such as quick-service, drive-thru and delivery — showing success during the pandemic.
“The reality is there are operators across the entire industry that have been impacted,” Bené said. “We are much better together. All types of operators — including independents, franchisees and chains — working together will make us stronger.”
Bené, who served as president and CEO of Houston-based distribution giant Sysco Corp. before taking on the association role, added that suppliers, distributors and operators have to work together to help the recovery.
“Great ideas come from everywhere,” he said.
Some pandemic trends are likely to remain, even after a potential vaccine is widely available, Bené said.
Consumers’ adoption of off-premise use of restaurant will likely remain, he said, and they have accelerated their use of new technology, such as smartphone apps and quick-response, or QR codes. The savings of not having to print menus and the flexibility to change prices quickly could be long-term advantages, Bené noted.
With reduced dine-in capacities, brands will discover ways to use real estate better with smaller footprints and catering possibilities.
Bené advised that the top thing anyone in the industry should do is to remain engaged and to join some organization to make sure their voices are heard on issues from the economy to diversity.
“This is so much we can do,” he said. “There is so much impact we can have.”
The association has estimated that as many as 100,000 of the nation’s restaurants closed permanently because of the pandemic, and it estimated sales losses by the end of the year could total $240 billion.
Prospects for more federal aid are on hold until after the November elections.
“Certainly for restaurant operators, we didn’t have a lot of vote in whether we were closed or when we’d get a chance to reopen,” Bené said.
“We’ve done an amazing job as an industry, trying to create the environment where consumers and guests can feel safe coming into a restaurant,” he said. “But we need to continue to tell that story.”
Title sponsors for MUFSO include the Coca-Cola Company, PepsiCo Foodservice and Johnsonville Foodservice.
Contact Ron Ruggless at [email protected]
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