(WNCN) — The COVID-19 pandemic has devastated the restaurant industry and advocates are calling on Congress to pass immediate stimulus help and legislation.
The National Restaurant Association, in a letter to Congressional leadership, shared that thousands of restaurants could close in the next three weeks, in addition to the 110,000 that have already shuttered in 2020.
New survey findings from the foodservice trade association illustrate “continued business deterioration across the restaurant industry and offering support for the moderate compromise proposal as a ‘down payment’ toward a larger relief package in early 2021”.
“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,” said Sean Kennedy, executive vice president for Public Affairs in the letter.
Around 17 percent of restaurants are predicted to be closed permanently or long-term, according to the report.
Also, the association found that 87 percent of fullservice restaurants, whether it be an independent, chain or franchise eatery, reported an average 36 percent drop in sales revenue.
“For an industry with an average profit margin of 5-6 percent, this is simply unsustainable,” the report continues.
Fifty-nine percent of operators say their total labor costs (as a percentage of sales) are higher than they were pre-pandemic.
“For every month that passes without a solution from Congress, thousands more restaurants across the country will close their doors for good,” the letter reads.
Another measure would be the passage of the Restaurants Act of 2020 which the group says would ensure that all restaurant segments that are suffering can receive federal support.
“We continue to urge immediate passage of this critical bill.”
The National Restaurant Association Research Group conducted a survey of 6,000 restaurant operators and 250 supply chain businesses.
Read the full letter here.
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