Almost half of restaurants that didn't receive a grant from the $28.6 billion Restaurant Revitalization Fund (RRF) don't believe they'll survive the pandemic without more financial aid, according to a recent survey from the National Restaurant Association.
Data was collected by the National Restaurant Association Research Group from 4,200 restaurant operators between January 6-18.
The Association made Congress aware of these findings in a letter Monday, in addition to grave information on how much the Omicron variant has impacted operations.
According to the survey, 88 percent reported a decline in customer demand for indoor dining. Also, more than three quarters (76 percent) said business conditions are worse than they were three months ago, and 74 percent said their restaurant is less profitable compared to pre-COVID.
Sean Kennedy, the Association's executive vice president of public affairs, said the industry is at an inflection point and that congressional leadership is needed now more than ever.
“Two years into the pandemic, restaurants are still struggling to keep their doors open amid a surge in coronavirus cases, inflation, a labor shortage, and supply chain delays,” he wrote in the letter. “New data from our 10th COVID-19 Operators Survey show that restaurant recovery is paralyzed and nowhere near complete.”
In light of the findings, the Association called on Congress to replenish the Restaurant Revitalization Fund during the upcoming legislative session.
The organization estimates more than 900,000 jobs were saved by the initial round of RRF grants and that full replenishment would maintain more than 1.6 million positions.
Ninety-six percent of recipients said the grant made staying in business more likely, and 92 percent said the grant helped pay expenses or debt that accumulated since the start of COVID.
The RRF received more than 370,000 applications asking for $76 billion last year, but more than 177,000 restaurants and bars came away empty-handed. Legislators have attempted to add $60 billion to the fund via the Restaurant Revitalization Fund Replenishment Act and the ENTRÉE Act, but neither bill has received much momentum. Earlier in January, Senate Small Business Chairman Benjamin Cardin revealed that a bipartisan group is working on a bill to provide $40 billion in aid to restaurants.
Ninety-four percent of respondents from restaurants that applied for the RRF but did not receive funding said a future grant would enable them to retain or hire back employees.
“This highlights how impactful RRF replenishment would be,” Kennedy said.
Because of the acceleration in COVID cases, 51 percent reduced hours of operation, 34 percent closed on days they would usually be open, 26 reduced seating capacity, and 10 percent shifted to off-premises only for a period. Only 3 percent reported improved business conditions in the past three months.
Recent actions taken by these operators have led to less-than-favorable numbers. Sixty-three percent said sales volumes in 2021 were lower than 2019, and 73 percent reported customer traffic was lower in 2021 than two years prior. Just 25 percent witnessed increased same-store sales between 2019 and 2021, and only 18 percent experienced an increase in traffic.
A large portion of sales growth was driven by higher menu prices to offset the inflationary environment. The food away from home index rose 6.5 percent in December year-over-year, the largest increase since January 1982. The price of quick-service meals jumped 8 percent, while full-service menu items lifted 6.6 percent.
Eighty-three percent said total costs were higher in December than the year-ago period. Nine percent reported lower costs. Labor shortages continue to weight heavily as well, with the industry more than 650,000 jobs shy of where it was prior to the pandemic. That loss is 45 percent more than the next-closet industry, according to the Association.
The Independent Restaurant Coalition recently released data that's just as grim. From a survey of almost 1,200 operators of independent restaurants and bars, it found that among those that didn't receive RRF grants, 42 percent are in danger of filing bankruptcy. Additionally, 28 percent of those same businesses have received or are anticipating getting an eviction notice compared to 10 percent among those that received Restaurant Revitalization Fund grants.
“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,” Kennedy said. “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.”