Reaction to COVID-19 relief bill mixed as restaurants close doors

Published on
December 3, 2020

Restaurant organizations are reacting both positively and negatively to a new USD 908 billion (EUR 751 billion) COVID-19 relief bill proposed by a group of U.S. legislators.

Due to renewed indoor dining restrictions in several U.S. cities and states, many restaurants are temporarily – or permanently – shutting their doors, and many others are struggling to stay afloat. Seafood suppliers, distributors, and wholesalers are, in turn, taking a hit from the widespread closures.

The congressional proposal, which includes USD 228 billion (EUR 189 billion) for Paycheck Protection Program subsidies focused on small businesses and additional unemployment benefits, is an effort to compromise on an economic stimulus package, which legislators could not agree on before the November election, The Washington Post reported.

“Once again, restaurants are dangerously close to being locked out of relief from Washington,” National Restaurant Association Executive Vice President of Public Affairs Sean Kennedy said in a press release.

However, the compromise plan “offers an excellent starting point,” he noted.

The stimulus proposal includes some “much-needed short-term stopgaps that will help restaurants continue to serve their communities during the holiday season,” Kennedy said. The bill includes a second round of PPP funding and temporary liability protections for restaurant operators, he noted.

“The restaurant industry has been the hardest hit by the pandemic and recent limitations in dozens of states are pushing operators beyond their limits to survive,” Kennedy said.

However, the Independent Restaurant Coalition said the proposal provides no direct aid for independent restaurants. 

"The Problem Solvers Caucus proposal will not solve anything for the hundreds of thousands of neighborhood restaurants facing permanent closure this winter," Kevin Boehm, IRC co-founder and co-founder of Boka Restaurant Group in Chicago, Illinois.

The first round of Paycheck Protection Program loans “did not work as advertised" for restaurants and bars, Boehm said.

“More than one in six restaurants are already permanently closed and two million restaurant workers remain unemployed – more than any other industry,” he said.

Plus, things have only gotten worse as the pandemic has continued.

“Today, the situation for restaurants is worse than it was when PPP was first passed in the Spring: the virus is surging in new communities, limits on indoor dining are back, and colder temperatures are preventing outdoor dining,” Boehm said. “A few weeks of payroll is not the best solution to ensure our industry can fully reopen and reemploy millions of Americans.”

In fact, many restaurants and restaurant groups have said they will temporarily close down for the winter because indoor dining is not allowed in their cities or states, and the weather is too cold for guests to sit outdoors.

Union Square Hospitality Group’s 19 restaurants in New York, New York will become takeout only as COVID-19 cases rise in the city, the New York Post reported.

“It seems daily we are hearing of more restaurants going on either temporary shutdown or takeout only. The restricted dining numbers don’t make financial sense,” Laura Ramdsen, co-owner of New Bedford, Massachusetts-based processor Foley Fish, told SeafoodSource.

New restrictions are also frustrating business owners, she said.

“Restaurant owners are increasingly frustrated, as are we, that they have completed all the mitigation measures, have no cases at their businesses, and are still forced to shut down,” Ramsden said. “The broad brushing of the entire industry is extremely punitive to restaurateurs (and their suppliers) who have taken all the appropriate measures to keep their customers and staff safe.” 

As a result of indoor dining closures, Foley Fish is seeing a large reduction in orders, especially shellfish, because seafood offerings are limited with takeout offerings, Ramsden said. “We are seeing compounding business drops of 10 percent each week.”

Foley has been focusing more on retail accounts and direct-to-consumers channels since the start of the pandemic in order to shore up significant lost foodservice sales.

Since the cold weather set in this fall, Worcester, Massachusetts-based Worcester Restaurant Group has lost around 20 percent of its customer base, Co-owner Robb Ahlquist told SeafoodSource.

“We weren’t sure how many would convert from dining outdoors to indoors. Now we know that a significant number won’t dine indoors,” Ahlquist said.

As a result of restaurants’ closures since the start of pandemic and restrictions on indoor dining, Ahlquist said the restaurant group, which operates four eateries include the seafood-focused The Sole Proprietor, said it has slashed seafood purchases by around 50 percent.

“Our menu was more extensive [pre-COVID-19],” Ahlquist said. “We are trying to be more efficient in every way possible.”  

Photo courtesy of Drazen Zigic/Shutterstock

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