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US restaurant industry asks Congress for $240bn in federal aid to survive coronavirus

by Business News Report

The leading restaurant lobby on Monday asked Congress for $240 billion in federal aid, saying the industry has suffered more than any other and needs a dedicated fund to stave off disaster.

Four in ten restaurants have closed — some for good — and eight million employees have already been laid off or furloughed, according to the National Restaurant Association. That represents two-thirds of all restaurant jobs in the United States. The trade group estimates restaurants lost out on $30 billion in sales in March and is on track to lose $50 billion in revenue in April. “Every restaurant model, from the beloved corner diner to the favorite independent restaurant to the well-known chain, has an uncertain future as economic damage wrecks an industry that is only marginally profitable even in the best of times,” wrote Sean Kennedy, the group’s executive vice president of public affairs to leaders of the House and Senate.

Restaurants are one of the largest employers in the U.S. with more than 12.2 million workers before the pandemic broke. Employment totaled more than 15.5 million including workers at hotels, sports venues and other sites serving food, the NRA estimates. Kennedy said the government’s popular Paycheck Protection Program to help small businesses is too limited for most restaurants. The loans only last eight weeks from the time they are granted and require businesses to spend at least 75% of the loan on salaries. The NRA said restaurants will need loans for a longer period, starting when they are allowed to reopen, and need more flexibility on how they use the money. Nonpayroll costs are high and even the restaurants that have remained open are struggling to pay them with reduced sales and skeleton staffs. Some 60% of the 6,500 restaurant owners surveyed said existing federal emergency measures won’t help them keep employees on their payrolls throughout the downturn, the trade group said.

The small-business program, for its part, has already run out of its initial $250 billion in funds and Congress is negotiating to more than double the money available. A final vote is expected this week.

Assuming the economy begins to gradually reopen by June, the NRA estimates total restaurant losses of $240 billion by year end. The group is seeking a “Blueprint for Recovery plan, administered by the Treasury, to help with operating expenses, worker rehiring and retraining and adjustment to new health and social-distancing standards. “The restaurant industry has been the hardest hit by the coronavirus mandates — suffering more sales and job losses than any other industry in the country,” Kennedy wrote in a letter sent to MarketWatch. ”As past recoveries have proven we will be one of the slowest to bounce back.” Congress has already put in place a bailout for the airline industry as well as small businesses and more industries might line up, including the hotel and travel business. State and local governments are also asking for massive doses of federal aid to offset collapsing budgets and tax returns.


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