Operations

Survey: Independent restaurants face a dire future

Independent operators surveyed by the James Beard Foundation said they’d laid off 91% of their hourly workers, and just 1 in 5 expects to remain open for the duration of the government-mandated dine-in shutdown.
independent restaurant
Photograph: Shutterstock

Independent restaurants have been decimated by the impacts of the coronavirus, and current government relief programs aren’t an adequate lifeline, according to the results of a new James Beard Foundation (JBF) survey.

Independent operators, on average, have laid off 91% of their hourly workforce and nearly 70% of their salaried employees, according to the JBF’s survey of 1,400 restaurant owners earlier this month. That’s up from last month, when survey respondents said they had been forced to lay off 78% of their hourly workers and 58% of their salaried employees.

Just 1 in 5 restaurant owners who are under state-mandated dine-in shutdowns said they were very certain or somewhat certain that they will be able to keep their businesses running until normal operations resume.

“We have been decimated by coronavirus,” chef and restaurateur Tom Colicchio said during a conference call Thursday to discuss the survey. “Last week, I felt optimistic. This week, you have to understand this is a dire situation we’re in.”

Colicchio and other members of the recently formed Independent Restaurant Coalition say the government’s Paycheck Protection Program (PPP) does not meet the needs of independent restaurants, saddling them with tremendous debt while still making them vulnerable to closure.

More than half of the operators surveyed said they have taken on at least $50,000 in new debt obligations due to the pandemic. Among respondents, 80% had applied for a new Small Business Administration loan, 58% had applied for an Economic Industry Disaster Loan or grant, and 34% said they had applied for a community-based loan or grant through their city or state.

As the shutdown continues, many restaurants that are still open fear they will need to close soon, the survey found.

Nearly 6 in 10 restaurants said they could survive for one more week to one more month. Only 1 in 5 operators felt confident their business could remain open until normal operations resume.

If they are able to reopen, 41% of operators are concerned about the slow return of customers to dining rooms, and 35% say their biggest worry is having enough cash to pay vendors.

“We need to save this industry, and PPP is not going to do it,” Colicchio said. “We are in dire shape right now.”

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