Restaurants and Bars Face Bankruptcies, Evictions Without Federal Relief

Many of the companies that did not receive Restaurant Revitalization Fund grants from the federal government during the pandemic are facing dire situations.

Nearly 60% of restaurants reported sales decreased by more than half in December 2021 during the Omicron surge. 

Nearly 50% of businesses without federal grants were forced to lay off staff because of a COVID-19 related closure or lack of sales in December. This is only true for 33% of businesses that received RRF.

These data come from the Independent Restaurant Coalition (IRC), which last week released results from nearly 1,200 members of the independent restaurant and bar community in all 50 states.

The survey responses were collected in January and show the precarious situation facing small restaurants and bars as well as the impact of the Omicron variant in recent weeks.

“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,” Erika Polmar, executive director of the Independent Restaurant Coalition, said in prepared remarks.

The IRC measured independent restaurants’ difficulties in a variety of ways. It noted, for instance, that the Omicron variant is affecting restaurant reservations in cities around the country. Reservations in Brooklyn (68%), Chicago (72%), New Orleans (85%), and Los Angeles (52%) are far below their 2019 levels. And 58% of businesses reported that their sales decreased by more than half in December 2021.

It also reports that 28% of businesses that did not receive RRF grants have received or are anticipating receiving an eviction notice compared to just 10% that received RRF grants.

Also, restaurant and bar owners who did not receive an RRF grant are taking on more personal debt with 41% of people that did not receive RRF reported taking out new personal loans to support their businesses since February of 2020. This is only true for 19% of businesses that did receive an RRF grant.

At the same time, restaurants are taking measures to retain staff amid the Great Resignation. IRC found that  84% of all restaurants reported raising wages and that 37% of all businesses reported adding paid sick leave benefits for employees. Also, 21% of all employees reported starting to add paid vacation for employees.