It’s hard to overstate just how catastrophic the COVID-19 pandemic has been for the restaurant industry.
Colorado restaurants have collectively lost billions of dollars this year — nearly $1 billion in April alone. In October, restaurants told us sales were down about 40% on average — and 7% said sales were down more than 80%. Based on staffing levels at that point, we estimate the industry had shed about one third of its workforce — nearly 70,000 jobs — which is even more significant when we consider that this sector historically employs 10% of the state’s labor force. And the situation continues to get much worse: More than 25 counties are now in "level red" of restrictions, which prohibits indoor dining. They’ve had to lay off the majority of their employees for a second time, and they find their sales crippled anew. What’s worse, 24% of restaurants in these counties say they will consider closing permanently within one month — and 60% say they’re not sure they can make it three months.
Restaurants have consistently said they need two things to better their odds of surviving this crisis: significant cash relief and increased capacity.
This has driven much of our advocacy agenda throughout the pandemic. Restaurants got a much-needed bridge with the federal government’s Paycheck Protection Program, even if it wasn’t ideally structured for this industry at its inception. We’ve supplemented that by asking all levels of government to consider ways they can help restaurants add revenue streams (like to-go alcohol); help restaurants keep cash on hand (like tax breaks and removing regulatory fees and burdens), or help restaurants add seats (like extended patio programs).
Unfortunately, we’re now facing a very dark winter — one in which these stop-gap solutions are simply not going to be enough to get many of our restaurants to the other side of this crisis. And with capacities being further restricted, significant cash relief has become imperative.
The special session of the state legislature offers a start via direct aid and a tax break. This aid is relatively modest: it will allow restaurants to keep up to $2,000 of collected sales tax each month for the next few months, and it will provide grant assistance. But every little bit helps, and while that may not be enough to pull restaurants back from the brink, that extra cash may allow them to pay their utilities, upgrade their contactless payment, or heat their patio.
Local governments are also stepping up, funding grant programs with CARES Act dollars, expanding patios through the winter season, and passing local legislation to limit third-party delivery fees, to name just a few examples.
Combined with other efforts, these programs will give some restaurants the means to scratch by for a little longer. They’ll go even further if the state takes up more relief efforts in the general session that starts in January, and if municipalities across the state consider how other regulatory burdens, like minimum wage hikes, will add significant costs to restaurants that are already on the precipice of calamity, and delay these actions.
But the shortfalls of these programs also highlight how essential it is that we see further meaningful cash relief from the federal government: the state and local governments are doing what they can, but only the federal government can provide a package large enough that will give our restaurants the best shot at making it to the other side of this crisis. This could be an extension of the Paycheck Protection Program, an industry-specific grant program like the RESTAURANTS Act, a small-business relief program like the RESTART Act, championed by Colorado’s U.S. Sen. Michael Bennet, or a combination of these. The key is that we need Congress to act quickly; this industry doesn’t have time to wait another pay period let alone for a new administration.
Without more help, we are facing the implosion of this sector. That will have a devastating effect on our local economies. And it will mean that our communities no longer look like our communities.
We’re all going to want to commiserate about this challenging year in our favorite restaurant or bar once we can finally meet again. We need our elected representatives at all levels of government to make sure that’s actually a possibility.
Sonia Riggs is president and CEO of the Colorado Restaurant Association.