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Financing

Warning of dire fallout from omicron, National Restaurant Association presses for federal restaurant aid

The group found that nearly half the nation's restaurants believe they won't survive the pandemic without direct financial aid from Washington.
Photograph: Shutterstock

Nearly half the restaurants that didn’t get an infusion of working capital from the Restaurant Revitalization Fund (RRF) are doubtful they will survive the pandemic without direct financial assistance from the federal government, according to the National Restaurant Association.

The association found in a survey of operators that the industry views a re-up of the RRF as essential to holding onto their workers, particularly as the business contends with a spike in coronavirus infections from the omicron variant. The canvass revealed that 88% of the nation’s restaurants saw customers cut back on dine-in visits because of the steep upswing in COVID-19 cases. About 76% of operations reported that business conditions are worse today than they were in October, when the delta variant was fueling a dramatic surge.

The industry views a re-up of the RRF as a potent remedy, according to the survey results revealed Monday morning by the association. The canvass found that 94% of operators who applied for a RRF but never got the funding are confident they could rehire or retain their current staffs if Congress allocated more money to the program.

The association noted that the RRF saved 900,000 restaurant jobs and kept the lights on at 96% of the recipients who received funding. The program was largely idled after its initial funding of $28.6 billion was depleted in less than three weeks. About 101,000 restaurants were provided with grants of up to $10 million, but 177,000 applicants were left empty-handed.

The Biden administration said at the time that the applications of qualifying operators who failed to get any money would be kept in the order they were received in case additional funds were found. That was back in April.

About $43.6 billion would be needed to meet those obligations, according to a variety of estimates.

A number of proposals have been introduced in Congress since then to replenish the RRF, but none came close to passing despite the support that was voiced by lawmakers. Hopes flickered again several weeks ago when news leaked of efforts by Sens. Ben Cardin, D-Md., and Roger Wicker, R-Miss., to hammer out a bipartisan replenishment bill. Cardin, chairman of the Senate Committee on Small Business and Entrepreneurship, said the measure would seek $40 billion in new funds.

The National Restaurant Association highlighted the findings of its survey in a letter sent Monday morning to Congressional leadership.

“After two years of closures, COVID-19 variants, worker shortages, and inflationary pressure, a dangerous number of restaurants are at the end of the line,” wrote Sean Kennedy, EVP of public affairs for the association. “The RRF was a critical lifeline to many, but far more remain on the sidelines, desperately looking for support amid continued economic uncertainty. The decisions you make in the coming weeks will be critical to the future of the nation’s restaurant industry.”

The association’s efforts to push through a re-up of the RRF follows a similar attempt 10 days ago by a group that represents only independent restaurants, the Independent Restaurant Coalition, or IRC. That group warned lawmakers and the public that 28% of independent restaurants nationwide are facing eviction because they lack the cash flow to pay their rents. It also concluded that 50% are contending with the possibility of bankruptcy.

As part of the lobbying effort, the IRC released a letter to federal lawmakers from the mayors of 27 major cities. The communications pleaded with the members of Congress to provide more direct aid to the nation’s restaurants.

The National Restaurant Association is the majority owner of Restaurant Business.

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