Restaurants facing the changing weather and running out of cash

A worker wearing a safety mask cleans a table in front of a pizza restaurant in San Francisco, California, USA, on Monday, June 15, 2020.

David Paul Morris | Bloomberg Getty Images

Exactly one year ago, Adam Remel was struggling to find workers. The owner of Bellefontaine, a local craft beer bar, Breffontaine, Oracle, was gearing up to open its new events and catering business, and the tight labor market stood in the way of finding talent.

Fast forward to this fall, millions are out of work and talent is no longer a battle. Instead Rammell’s biggest challenge will be an epidemic winter, like no one else due to the epidemic.

Rammel prevented the event space from operating, instead building it a high-end restaurant called The Syndicate. Meanwhile, his bar may be operating without outdoor food options that have kept him protected for the past few months. In addition, Ramel is facing a 10am curfew for last call serving drinks and is operating with limited seating capacity to comply with Social Security requirements.

“The last six months have been the most challenging, which I hope we will ever face,” Rammel said. “We’re just fighting every day for a living. People like the food outside right now. We’re going to try to be creative, I’m looking [heated] Igloo and everything else to be able to use that place in winter. Right now, winter is our biggest fear. ”

New data from the National Restaurant Association outlines how difficult the industry has become, with an estimated $ 165 billion in sales slipping from March to July, and more than 8 million workers either outbreed or at the peak of the outbreak Closed. Projects from the Industry Advocacy Group which are open to all eating and drinking places, 15% of some 100,000 establishments, not trading in any capacity. It remains to be seen how many of these have closed.

“We’re at a turning point in the industry. First of all, the seasons are changing, we’re limping through the high season and going into the low season. We’re doing that when the industry continues to its weakest point ., Ever, “said Sean Kennedy, executive vice president of the Public Affairs Association. “And so far, the federal response has been to provide eight weeks of federal funding for an epidemic that has brought the industry to its knees for six months now.”

A survey of more than 3,500 members of the group shows that sales are down by about a third, and about 40% of operators say their restaurants will go out of business in six months if the economic situation persists. With sales declining, 60% of respondents also stated that they were spending more on operating costs as a percentage of sales.

“The average restaurant has 16 days of cash,” Kennedy said. “It is simple mathematics that something needs to be done.”

Despite the loss of several jobs in the industry at large in recent months, publicly traded restaurants are in the race to hire one as consumers opt for digital ordering and contactless experiences. Domino’s, Papa John’s, Chipotle, McDonald’s, Dunkin ‘, Wingstop and more have said they are looking at a combined half a million workers as a business boom. A survey by the National Restaurant Association found that nearly 70% of operators added curbside takeout and about a third added third-party distribution to boost business while facing limited operations.

Small businesses, beyond the restaurant industry, are waiting for Washington to move on to help with the next round. Recent data from the National Federation of Independent Businesses shows that one in five businesses say they will have to close if the economic situation does not improve within the next six months. Advocacy group surveys show that 84% of respondents have used their entire paycheck protection program loan, with the remainder likely not far behind. Forty-seven percent of PPP borrowers expected additional assistance over the next 12 months, a survey of 562 members found.

Rommel has run $ 160,000 in PPP funds and through his disaster loans from the Small Business Administration, and said the next wave of aid is significant.

“Mom-and-pop independent restaurants are lifelike and character in our small towns,” he said. “We need all the help we can get.”