Times of E reporter Skyler Rossi spoke with Erika Polmar, the co-founder of the Independent Restaurant Coalition, on Sept. 15 about the state of the restaurant industry 18-months into COVID-19. The largest hurdle many restaurant owners face is the rising costs to operate their business, she says. It will take more government funding to get thousands of restaurant owners out of debt.
Polmar and other restaurant owners created the coalition in 2020 to support independent restaurant owners. They advocate for the Restaurant Revitalization Fund, a $28.6 billion fund established by the Small Business Administration earlier this year to aid restaurant owners. More than 278,000 restaurant owners and operators applied for the fund, the SBA reported, requesting more than $72 billion in funds. The first three weeks of the fund was reserved for priority applicants, such as women, people of color and veterans, but due to several lawsuits, nearly 3,000 people in that group promised funds never saw it. Overall, two-thirds of applicants never received money.
The Independent Restaurant Coalition is pushing for the fund to reopen, as thousands of owners sit in its portal eligible for the funding. “They’ll just languish there and they won’t receive the assistance,” Polmar said. “They need to survive. So we are advocating fiercely to replenish that fund.”
Responses have been edited for conciseness and clarity.
How has the pandemic affected the restaurant industry? What exactly is the state of it right now?
The restaurant industry has been severely impacted. It’s a place where we go to gather, and it has been in a rather precarious position as the pandemic has raged. During those 18 months of closures, restaurants have accumulated mountains of debt, it’s absolutely incredible to see the amount of debt these folks have accrued, and things like rent, deferred rent payments, and leases for equipment. So they have been struggling to reopen and navigate all of that debt, while also facing the fact that consumers aren’t necessarily ready to dine out yet. Or even if they are, having a packed restaurant for a beautiful summer weekend is not going to help them catch up on that 18 months of accrued debt. So it’s been super challenging.
Those that have received the Restaurant Revitalization Fund grant, about 100,000 people were successful in getting that funding, are feeling much more confident about their ability to navigate the current wave of the Delta variant and anything else that gets thrown their way because it’s provided them with a bit of financial stability. But two-thirds of the applicants that applied to the RRF did not receive that. And so their futures are much murkier. More than 82% of the folks that responded to our survey said that they are in danger of closing permanently if they don’t receive that assistance.
Amid some of the issues that restaurant owners have faced over the last 18 months, there’s been a national worker shortage as well. How has that affected restaurants reopening and their attempt to push forward?
I think there are definitely labor challenges depending on where you are in the country. But the bigger challenges are really the increased costs to operate a business. So the cost of suppliers, whether its ingredients or carrying out boxes have gone through the roof. And that is a far greater problem when it comes down to dollars and cents. When you see things like dining room closures and mask mandates, limited capacity, that also impacts your ability to be able to bring staff back and make sure that you have work for them. So you kind of have to look at that labor issue from both sides. A member of our coalition operates a bar in New Orleans and he said, I lay awake at night, every night, not wanting to have to lay anybody off again because last time when I had to let them go, it was the hardest thing I did. So folks are cautiously bringing people back. And again, you know, having the Restaurant Revitalization Fund grant gives them a little more confidence in doing that, because if they have a slowdown, they can still keep their staff.
How have vaccine, mask mandates and the opposition to them affected business?
Restaurants and restaurant employees have been committed to public safety forever. These are some of the most well regulated businesses, when it comes to health and safety. And they all take that very seriously. And so generally we’re trying to keep our guests safe when they’re dining with us. And because of the way the COVID virus spreads, that’s made things even more challenging. But you can look across the country and see restaurants who have gone to great lengths to make sure that even with the spread of the virus, they have done everything that they can from air filters to plexiglass to masking staff to ensure that they can keep their guests safe.
The bottom line is that it’s really challenging for restaurants to be the arbiter of public policy. They’re trying to keep everybody safe, and it’s easier to have that guidance from folks, public health experts and not have individual restaurants have to make that decision based on their research. We have all this guidance at a federal and state level. And they’re really looking to follow and abide by that and do what’s best for the community. When you look at a city like Portland, vaccine and mask mandates don’t nearly impact business as much as if you go to the other side of our state, which is much more rural and resistant. It creates more challenges from a customer service perspective. But when we have consistency and guidelines, it certainly makes it easier for frontline staff, like restaurant workers, to be able to navigate that.
This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.