More than two-thirds of restaurant employees across the country are out of work.
A new survey from the National Restaurant Association illustrates the toll the coronavirus pandemic has taken on restaurants in the region. Sales are way down, and some restaurants fear they won't make it to the other side of this crisis.
Virginia and Maryland restaurant associations both released state-specific data, which show that most restaurants have laid off or furloughed staff members. A staggering 78% of Virginia's restaurant workforce — more than 237,000 people — are now out of work, according to the survey. In Maryland, around 75% of employees — 150,000 people — are out of work. In both cases, that's a bit higher than the nationwide figures; across the country, two-thirds of the industry workforce is out of work, the association says. Numbers for the District were not available at the time of publication.
The layoffs come as restaurants grapple with plummeting sales. On average, Maryland restaurants witnessed a 75% decline in sales compared to this time last year. Virginia eateries saw a 77% drop. The report predicts the Commonwealth's restaurant and foodservice industry will lose $1.3 billion in sales this month alone. A number of establishments have transitioned to exclusively take-out and delivery business or tried to get creative by selling groceries directly to consumers. But the report makes it clear these sales are no substitute for business as usual.
Most restaurants are still operating in some capacity, but in Virginia, roughly 30% have closed temporarily. In Maryland, that number is 40%. Owners are worried that, without some form of aid, they'll have to close for good.
David Guas, the chef and owner of Bayou Bakery in Clarendon, Va., has closed his business for the time being, and his entire staff is furloughed. Guas called the situation for his industry "a nightmare."
"I didn't have enough money to sustain the business, it's as simple as that," he says. Guas stayed open for grab-and-go business until March 31, but he says that his sales dropped from between $3,500 to $4,000 a day to between $500 to $600 per day.
"I could use all of that [money] to go toward payroll and probably last another couple of weeks, but my vendors are going to start calling, saying 'Where is our check?'"
Guas has been working with the organization Real Food For Kids to provide meals for local students, which is helping him keep busy. But he is hoping that federal aid will come through for his business.
"This is all ... I've ever done. My life savings is in my restaurant," he says, "Without it, you just don't feel complete."
Industry Leaders Press For Federal Action
"In good times, restaurants are a very low margin business," Sean Kennedy, the National Restaurant Association's executive vice president for public affairs, said in an interview with MarketWatch, "They generally have about 16 days of cash on hand. We're more than a month into the shutdown that forced us to make very difficult decisions."
In a letter to Congressional leaders Monday, Kennedy said the restaurant industry has been "hardest hit" by the pandemic and called on lawmakers to step up relief efforts. The Association is asking for $240 billion in aid specifically for the industry. According to the new survey, 61% of restaurant operators do not believe existing assistance programs will be enough for them to keep employees on the payroll.
A $350 billion small business loan fund — called the Paycheck Protection Program — ran out of money after only two weeks, though lawmakers have reached a deal to replenish the money. Guas, from Bayou Bakery, says he hasn't received any money through the program. There was widespread outrage when news broke that several large chains, like Shake Shack, Potbelly and Ruth's Chris Steak House had benefited from this funding.
Industry leaders also say the PPP, at least the way it's set up now, won't do enough to help restaurants. Loan recipients are required to use the money before June 30, but Marshall Weston, Jr., CEO of the Restaurant Association of Maryland, says that doesn't make sense.
"That is just not working for most restaurants," he says, "The restaurants in Maryland don't see a timetable anytime in the next [few] weeks when they're going to reopen."
Weston says he wants the Treasury Department to rework the guidelines for the program so restaurants can use those funds through December.