Many restaurants were already in dire straits. Omicron made it worse.

Many restaurants were already in dire straits. Omicron made it worse.

Many restaurants were already in dire straits. Omicron made it worse.

by Andy Medici| via

Restaurants that did not receive grants from the Restaurant Revitalization Fund are more likely to declare bankruptcy in the coming months — and the industry as a whole has suffered due to the Omicron variant.

The bleak findings are from a January survey of 1,200 restaurants and bars by the Independent Restaurant Coalition. The survey found 42% of businesses that did not receive RRF funds were in danger or had filed for bankruptcy, compared to 20% of those that received RRF grants.

Meanwhile 28% of businesses that did not receive RRF grants are anticipating or have received eviction notices, compared to just 10% who had received grants.

“This data makes clear what we’ve been saying all along: independent restaurant and bar owners left out of the Restaurant Revitalization Fund are taking on massive debts, laying off employees, and selling personal assets to stay in operation,” said Erika Polmar, executive director of the Independent Restaurant Coalition, in a press release announcing the survey. “The Omicron surge has pushed many restaurants to the brink, especially those still waiting for Restaurant Revitalization Fund grants.”

The quickly exhausted Restaurant Relief Fund has yet to be replenished after quickly running out in summer of 2021. Eligible applicants to the program had requested more than $72 billion in funds — far more than the $28.6 Congress had approved for the program.

Legislation to replenish that funding has stalled in a Congress — and current efforts to pass a more targeted relief package might leave supporters underwhelmed. In September Rep. Dean Phillips, R-Minn, secured a promise from House Speaker Nancy Pelosi, D-Calif., for a vote on a targeted small business stimulus passage.

Meanwhile business owners that did not receive an RRF are taking on more debt, with 41% saying they took out new personal loans since February 2020, compared to just 19% of businesses that did receive a grant.

Businesses that did not receive a grant reduced their staff by 30% on average since the pandemic began, compared to just 21% by those who did receive a grant. About 25% of those that did not receive a grant supported their business by selling a personal asset, while only 10% of those that did not receive a grant did so.

The Covid-19 Omicron surge has also hit the restaurant industry hard. The survey found:

  • 46% of businesses reported their operating hours were impacted for more than 10 days in December 2021.
  • 58% of businesses reported their sales decreased by more than half in December 2021.
  • Nearly two-thirds of restaurants reported needing to purchase Covid tests, however nearly 65% report trouble finding COVID tests and 38% report pricing of Covid tests increasing during December 2021.

So far, about 90,000 restaurants and bars have closed since the beginning of the pandemic, according to the National Restaurant Association. And the Omicron variant has pushed reservations in places such as Brooklyn, Chicago and New Orleans are below 2019 levels, according to the IRC.

But it’s not just the restaurant industry getting hit hard by Omicron. Personal services across the board are feeling the brunt of it, according to new data from payroll provider Gusto.

During the holiday season, when the tourism, accommodations, food and beverage and arts and entertainment industries typically see a boost, they instead cut back. That’s based on the average weekly hours for employees in those industries, according to Gusto. The average hours per week worked by employees in those industries nationwide fell from 21 hours in November to 19.9 hours in December, according to Gusto. Even during the first winter after the pandemic, in 2020, the average hours per employee grew from 20.2 hours in November 2020 to 22.2 hours in December.

Meanwhile, the number of Americans quitting their jobs in November rose to 3% — matching the all-time record first hit in September 2021. Restaurants were among the sectors with the highest rates.

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