US restaurants seek more help as COVID-19 struggles continue

The United States government needs to take immediate action to stabilize restaurants, an industry group said, even as seafood restaurants shut down or stop paying rent.

On 15 July, the National Restaurant Association (NRA) sent its “Blueprint for Restaurant Revival” to Congress. The comprehensive policy and legislative plan outlines “specific and immediate action the federal government should take to stabilize the industry in the short-term and set the foundation for long-term rebuilding,” the NRA said in a press release.

“In just the past two weeks, state and local government mandates have shut down almost 100,000 restaurants,” NRA Executive Vice President of Public Affairs Sean Kennedy said.

Since the restaurant industry was first shuttered, the NRA and other groups have asked for policies that “will allow us not to profit, but simply to survive this pandemic,” Kennedy said.

“Despite losing more jobs and revenue than any other industry in this country, Congress has chosen not to advance a recovery package that is tailored for the unique challenges of a restaurant on the cusp of bankruptcy,” Kennedy added. 

Upscale, casual dining, and fast casual seafood restaurants are all feeling the sting of dining closures due to COVID-19. Now months into the pandemic, the situation for even large, well-known chains is becoming dire.

Landlords of Red Lobster restaurants in several states are reporting that the Orlando, Florida-based chain owes them several months’ worth of rent.

The Chung family has filed a lawsuit alleging that Red Lobster owes them USD 125,000 (EUR 110,000) in back rent, while another landlord said she is owed USD 80,000 (EUR 70,000), KETK reported.

Red Lobster did not respond to SeafoodSource’s request for comment.

Houston, Texas-based Pappas Restaurants group recently said it is permanently closing five of its locations in Houston, including Pappas Seafood House, Pappadeaux Seafood Kitchen, and Pappas Shrimp Shack, Preview reported.

And Carlsbad, California-based Rubio’s Coastal Grill is closing 12 of its approximately 170 locations.

Upscale seafood eateries McCormick & Schmick’s and Oceanaire Seafood Room have also been forced to close some locations, according to news reports.

Closures and bankruptcies aren’t new amide the COVID-19 pandemic. As early as May, restaurant chains were filing for bankruptcy and closing locations. The NRA has called the losses “catastrophic,” and Florida-based Darden – which manages some of the largest dining chains in the country – has said sales have plummeted 43 percent.   

NRA’s Blueprint for Restaurant Revival is asking Congress to create a targeted Restaurant Recovery Fund to help counter the massive downturn. It would also create a mechanism for restaurants to access a second round of Paycheck Protection Program loans, and address liability protections for businesses.

Congress needs to establish a long-term loan program beyond PPP so restaurants can rehire, retrain, and retain valued employees by providing up to six months of operating costs and additional support, the NRA said.

The NRA is also calling on the government to replenish funding for Improve Economic Injury Disaster Loans (EIDLs), and advance grants to support businesses with major revenue reductions due to COVID-19. In addition, the government should provide customer and employee wellness tax credits to help with significant capital investments for employee and guest safety.

The NRA also said the blueprint would ensure “the stability of America’s food supply chain from farm to table” by prioritizing food and agriculture employees for testing, and receipt of a COVID-19 vaccine and providing Payroll Tax relief for restaurant employees as essential workers

Part of securing that food supply, the NRA states, could be accomplished by the U.S. government helping restaurants support at-risk communities. That can be accomplished through funding programs to feed at-risk populations, and providing greater access to restaurant meals for low income Americans.

“We are looking to Congress not only for support for our short-term survival, but to create a long-term framework that sustains our role as a key part of the food supply chain for the millions of families that rely on us for nourishment,” Kennedy said.

The Independent Restaurant Coalition has also proposed a USD 120 billion (EUR 107 billion) stabilization fund for the U.S. restaurant industry.

A recent report said that 85 percent of independent restaurants may close by the end of the year if direct government aid is not provided. 

Photo courtesy of Ken Wolter/Shutterstock