IRC: 86% of restaurants can close without RRF recharge

Dive brief:

  • More than 86% of restaurant and bar owners believe they will close without a grant from the Restaurant Relief Fund, according to an Independent Restaurant Coalition survey emailed to Restaurant Dive. That marks a 4% jump from traders who reported the same belief in September.
  • Nearly one in five restaurant owners say their credit score was reduced below 570 during the pandemic, which means they can no longer take out loans, including under credit administration programs. small enterprises.
  • This growing restaurant debt comes as the cost of goods continues to rise and wages rise, with labor costs at their highest level in 20 years.

Dive overview:

The IRC has been pushing for additional grants from the RRF for months. Operator cost and debt pressures are put to the test even more now, amid growing consumer anxiety over the omicron and delta variants of COVID-19. According to Black Box Intelligence, 60% of consumers have changed their cooking habits due to the delta variant, and restaurant sales fell in August compared to July due to the variant.

Some chains, including McDonald’s, have even closed their dining rooms again because of the delta variant – a move most independents can’t afford because they don’t have drive-thru. Omicron has also had an impact on confidence in the industry, and 69% of restaurateurs are highly concerned about the effect of the variant on their recovery.

The recovery has already been difficult at best – 41% of restaurants were unable to pay their October rent, according to Alignable. Unlike restaurant chains that have access to businesses with large pockets, independent restaurants typically don’t have the cash to cover rent when sales drop. As such, the recovery has looked very different to smaller operators who continue to struggle, with many large chains reporting two-year sales growth.

An RRF recharge might be one of the only solutions left for struggling freelancers who no longer have the necessary credit score to qualify for SBA programs. The IRC notes that nearly 200,000 restaurants did not receive a grant from the RRF in the program’s first and only cycle, and that only 101,004 of the 500,000 independent establishments operating in the United States received funding.

“Our elected officials did not adequately fund this very successful grant program and the time is now up for the thousands of restaurants and bars who applied and did not receive assistance,” said the executive director. IRC Erika Polmar in a statement. “Congress must act quickly and decisively to replenish the Restaurant Revitalization Fund and save the small businesses that will soon close in all states.”

The IRC is not alone in requesting a renewal of the RRF. The National Restaurant Association has also called on Congress to take action before winter, when indoor dining could be affected by anxious consumers unwilling to take risks. Currently, the RRF remains empty and no further Congressional action is expected at this time.

Source link

Comments are closed.