“The picture is grim,” Jessica Dunker, president and CEO of the Iowa Restaurant Association, said in no uncertain terms.
“We knew the precautionary step that shuttered large portions of our industry in an effort to fight the spread of the coronavirus would be detrimental, but our initial numbers indicate that for as many as 20 percent of our operators, there may be no coming back,” she said in a Thursday news release.
As the economy reels from shutdowns to fight the spread of the coronavirus, the restaurant industry in fact has been one of the hardest hit sectors.
Accommodation and food service workers filed the most unemployment claims between March 15 and 21, as reported by the U.S. Department of Labor, with 13,364 claims — far above the next sector, health care and social assistance, with 4,926 claims.
And the Iowa Restaurant Association this week reported that a survey of 670 operators, or about 10 percent of the state’s food service industry, found they have seen an 84 percent reduction in sales this month over March 2019.
The survey also found 35 percent of hospitality establishments are closed, including 91 percent of bars, and 82 percent of restaurants and bars have laid off employees.
Jordin Caviness owns Sam’s Pizza and Mister B’s Bar, Stadium Bar and Grill, Mulligan’s Pub, and Vito’s on 42nd in Cedar Rapids as well as Shuey’s Restaurant and Lounge in Shueyville.
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He estimated he’s seen a 75 percent drop in food sales across his businesses — with an even steeper drop off in alcohol sales — since Gov. Kim Reynolds ordered restaurants and bar shut except for carryout, curbside and delivery business on March 17.
Caviness is trying to stay upbeat, but it is a challenge, he said.
“What we’re trying to do is stay as positive as possible. We’re just trying to remain hopeful that people who are sick stay home as much as possible so we can get through this as quickly as possible,” he said.
“We’re doing all we can to keep some employees busy and offer food to people who want it.”
He quickly got his businesses switched over to focusing on to-go orders, but that is bringing in just enough to keep the lights on, he said. He estimated he had around 200 employees before the shutdown, and he’s since laid off about 90 percent of them.
“We aren’t looking at this as a true layoff but as a temporary business insurance policy. We expect to fully hire everyone back. It will be a decision that’s made depending on how the community responds when we reopen,” he said.
The Iowa Restaurant Association listed a number of steps the state government has taken to assist the industry — relaxing unemployment restrictions and penalties for employers and employees; expanding alcohol privileges to restaurants and bars to include carryout, delivery and drive-through for beer, wine and spirits; deferring sales, some property and state payroll tax payments; and creating a Small Business Grant Relief Fund.
The Small Business Administration also is offering a number of disaster relief programs.
Caviness said on Thursday that, until they know exactly what additional help may be coming, he’s just taking things one day at a time.
“We’re doing all we can and we are cooperating with what the governor and city officials say,” he said. “We’ve told our staff to remain hopeful and continue to do what they need to do to stay safe and take care of their families at this time.”
Chains hurting, too
Locally owned restaurants aren’t the only ones facing challenges. National chains, which have franchise owners across the state, are reporting losses as well.
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McDonald’s is working with franchisees to evaluate their operational feasibility and support financial liquidity, including through rent deferrals, and with suppliers on contingency planning, the chain said Wednesday in a filing with the U.S. Securities and Exchange Commission.
McDonald’s said in its filing it expects COVID-19 to hurt its financial results — though to what degree depends on the pandemic’s duration and scope — and could create challenges for the chain in maintaining its supply chain and labor force.
Yum Brands — parent company of KFC, Pizza Hut, Taco Bell and WingStreet — is helping franchisees in good standing that need access to capital, including with grace periods for certain near-term payments where necessary, the company said Tuesday in a securities filing.
As of Tuesday, 7,000 Yum Brands restaurants were closed globally, including more than 1,000 Pizza Hut Express locations in the United States.
Yum Brands anticipates its same-store sales for the fiscal quarter ending March 31 will drop in the mid- to high single-digit range — with a stronger impact likely at the end of the second quarter, June 30, as the number of affected markets grows, its filing said.
However, some chains are hiring. NPC International, which owns 1,234 Pizza Hut restaurants and delivery units in 27 states, announced Thursday it had an “urgent” need for new employees to meet customer demand, and was hiring delivery drivers, cooks and shift leaders.
A search of NPC’s website Thursday showed there are 54 such job openings across the Corridor.
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