Maryland has 11,000 restaurants with 200,000 employees.
Marshall Weston, president and CEO of the Restaurant Association of Maryland, knows what owners of eateries are facing.
“We have learned from surveys,” said Weston, “that 40 percent have closed temporarily or permanently, and from an employees’ point of view, the numbers are staggering – 150,000 have lost their jobs and 50,000 have seen a reduction in hours.”
Of the hard hit food services industry, Weston said, “The impact of the COVID-19 pandemic has been more painful to restaurants than just about any other industry.”
Restaurants that have remained open have pivoted to carry-out and curbside delivery.
“Most of them aren’t making money but simply trying to stay open for various purposes, like community goodwill, and to hold on to some of their employees,” Weston said.
Federal programs aren’t helping much, Weston said.
“They passed the Payroll Protection Program to offer loans to small businesses but these loans are not working for restaurants for many reasons,” he said. “First is the 75 percent requirement to [direct the money to] payroll costs but, at this point, they don’t have the sales or businesses to bring everyone back to work.”
Applying to approved banks for the loans “has been a mess. The SBA (Small Business Administration) system is not set up to handle the massive amount of applications and we’ve seen that it was grossly underfunded,” he said. “The guidelines for the loans remain unclear and business owners have been confused about how the program, which just ran out of money, can help them.”
All told, he said “about nine out of 10 eateries are nowhere near their normal sales volume, and there are so many small businesses across the country that there can’t be enough money to help everyone that needs it,” he said.
Still, he thinks “Gov. [Larry] Hogan has shown real leadership, been decisive and done really well explaining the decisions he’s made,” said Weston. “He has also been receptive to our association and our concerns. The Restaurant Association of Maryland and the National Restaurant Association have sent letters to our local congressmen to get the funding we need in order to survive this crisis.”
Vanessa Sink, spokesperson for the National Restaurant Association, said that a mid-April survey found that the industry has lost $80 billion, with four in 10 eateries currently closed.
“Some restaurants have had to change business plans for longer periods than others,” she said. “Switching from operating as a bistro that seats 100 customers to a carry-out service with limited hours is a significant adjustment.”
Sink said the other major finding from the restaurant survey is that more than eight million restaurant employees have been laid off.
“Before COVID-19, the restaurant industry was the second largest private sector employer [after health care], employing one out of 10 workers in the country, and we had projected at [the start of] 2020 that the industry would reach $899 billion in sales,” she said.
The restaurant industry “is an integral part of the U.S. economy,” said Sink, “and it’s withering on the vine.”
Looking ahead, she sees a hard road as restaurants work to reopen.
“What we love about restaurants is that they are social by nature and that is what will make it hard for them to come back. There will still be limitations, such as distancing tables, food handling and sanitation measures,” she said.
“Even once they can reopen,” Sink said, “it won’t be business as usual in the restaurant industry.”
By Mark R. Smith | Senior Writer | The Business Monthly