Restaurants and foodservice distributors continue to push the U.S. government for funding relief to help their businesses survive in the throes of the COVID-19 pandemic.
The restaurant industry is expected to realize losses of more than USD 240 billion (EUR 221 billion) nationwide by the end of the year, after losing USD 30 billion (EUR 28 billion) in March and USD 50 billion (EUR 46 billion) in April, the National Restaurant Association said in a press release.
“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,” NRA Executive Vice President of Public Affairs Sean Kennedy wrote to bipartisan congressional leaders, urging them to enact a new “Blueprint for Recovery” to provide targeted relief restaurants.
The NRA has proposed a USD 240 billion (EUR 221 billion) restaurant and foodservice industry recovery fund, a comprehensive grant program administered by the U.S. Department of Treasury to “support ongoing operating expenses and debt obligations from government-mandated closures, rehire and retrain our workforce, and provide a lifeline to reopen and readjust to a new era of increased distancing and heightened health and safety standards."
A new survey from the James Beard Foundation and the Independent Restaurant Coalition found that only one in five restaurant owners in cities that are shut down are very certain or somewhat certain that they will be able to sustain their businesses until normal operations resume.
The survey of around 1,400 independent restaurants also revealed that 90 percent had laid off their hourly workforce, and nearly 70 percent of their salaried employees.
The International Foodservice Distributors Association (IFDA) also wrote to congressional leaders about the critical need for economic intervention for the industry, which is projected to lose USD 24 billion (EUR 22 billion) through mid-June.
“While the CARES Act was an important start for our country and economy, many segments of the economy were not given the economic relief needed to sustain their businesses,” IFDA President and CEO Mark Allen said in a press release. “Congress will need to take subsequent action to ensure that foodservice distributors and their customers, like restaurants, have the liquidity necessary to get past the closure period and get back on track.”
IFDA is urging enhancements to the CARES Act, including allowing foodservice distributors to use the Paycheck Protection Program to pay suppliers, and providing additional funding to the program which would expand the loan limit to four times their monthly expenses.
IFDA is also asking Congress for tax credits for perishable product that could not be sold due to quarantine.
In positive news for foodservice distributors, US Foods said that affiliates of KKR have agreed to purchase USD 500 million (EUR 461 million) in newly issued convertible preferred stock of US Foods.
“We are pleased to see KKR return as a shareholder of US Foods as we seek to further fortify our balance sheet during the current difficult environment,” said US Foods Chairman and CEO Pietro Satriano in a press release. “This transaction positions us to continue to build on our strengths as the environment improves over time.”
The distributor also said it is still planning to close its previously announced acquisition of Smart Foodservice Warehouse Stores on 24 April. Smart Foodservice operates 70 small-format cash and carry stores saving restaurants and food business customers across several Western U.S. states.
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