A record 3.28 million filed for unemployment in the week ending March 21, a large portion of which came from the foodservice industry, according to a report from the U.S. Department of Labor.
The number was 3 million more than the prior week. The previous high for unemployment filings in a single week was 695,000 in October 1982. Almost every state listed COVID-19 as a reason for the increase in unemployment filings.
In the week ending March 14, 11 states reported an increase of 1,000 or more, with the top three being California (14,221), Washington (7,624), and Nevada (4,047). A majority listed food services as one of the areas that was hit.
Nearly all states have mandated the closure of dining areas, forcing restaurants to amplify their carryout, drive-thru, and delivery services. Businesses that don’t have the capability have been forced to temporarily close their doors without knowing when they might be able to reopen.
The NYC Hospitality Alliance said Wednesday that 1,870 New York restaurants, bars, and nightclubs reported laying off or furloughing 67,650 employees since March 20. To mitigate the financial effects of the virus, the organization recommended rent/mortgage forgiveness, the conversion of sales tax remittance into cash grants, addition of COVID-19 into insurance policies, and placement of a cap on delivery fees.
“It’s devastating,” said Andrew Rigie, executive director of the NYC Hospitality Alliance. “Restaurants, bars, and clubs and the people who work at them are the fabric of our communities. We need to do everything in our power, as fast as possible, to support these businesses and revive New York City’s economy, while protecting public health and safety.”
Several restaurant companies have announced major furloughs or layoffs in the thousands including Danny Meyer’s Union Square Hospitality Group, Cameron Mitchell Restaurants, Landry’s, J. Alexander’s, Golden Corral, Luby’s, and Craftworks Holdings.
The National Restaurant Association said economic impacts from COVID-19 on America’s second largest private sector employer could reach at least $225 billion during the next three months, with 5 million to 7 million jobs lost.
Mark Allen, president and CEO of the National Foodservice Distributors Association, said that with many operators closed and restaurant sales limited to carryout and drive thru, distributor sales have declined rapidly and substantially.
He added that foodservice distributors typically operate at a 2 percent margin or less, meaning a large change in sales can have a significant impact. He also noted that the foodservice distributor industry is valued at $280 billion, including 15,000 distribution centers, 350,000 employees and more than 153,000 vehicles.
There has been a bright spot in terms of job opportunities in the pizza sector. Papa John’s, Pizza Hut, Domino’s, and Hungry Howie’s have all announced plans to hire thousands of workers to meet the increased demand in delivery. In many cases the hiring process is much quicker, particularly for Pizza Hut, which promises to get drivers on the road in five hours, three times faster than the previous training procedure.