86% of restaurants, bars waiting for COVID-19 relief could close, IRC says

A restaurant trade group is urging Congress to act, saying that more than 86% of independent restaurants and bars that have not received COVID-19 financial relief are in danger of closing. 

The Independent Restaurant Coalition penned an open letter to Congress earlier this month. The letter was signed by more than 3,300 restaurants and bars from all 50 states. In addition, more than 5,000 people from the restaurant and bar community, including suppliers, signed the letter.

The coalition is asking Congress to replenish the Restaurant Revitalization Fund, which provided $28.6 billion in relief for more than 100,000 restaurants. However, the IRC said 177,000 applicants are still waiting for funding. 

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"Many of these restaurants and bars are sitting on 21 months of debt and cannot take another revenue downfall," the IRC said in a news release

Sean Kennedy, executive vice president for public policy at the National Restaurant Association, said the industry needs at least $40 billion to fund the nearly 200,000 applicants who didn’t receive grants.

"Congress went home and their neighborhood restaurants and bars are going out of business," Erika Polmar, Executive Director of the Independent Restaurant Coalition, said. 

While most restaurants in the U.S. are open without restrictions and often bustling, owners are entering their second winter of the coronavirus pandemic anxious about what’s ahead: They’re squeezed by labor shortages and skyrocketing food costs and the omicron variant is looming.

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"I’m extremely worried. I’ve never felt like we were out of the woods," said Caroline Glover, chef and owner of the restaurant Annette in the Denver suburb of Aurora.

The rapid spread of omicron already is pummeling the industry in the U.S. and elsewhere. According to the IRC, more than 90,000 restaurants and bars have closed since the beginning of the pandemic. Nearly 1 in 5 (18.3%) of restaurant owners reported having their credit scores reduced below 570 during the pandemic, according to the IRC, with many of those operators not being able to take on any more loans.

Glover in Colorado worries about renewed restrictions if infections climb. For now, business has returned, with her dining room back to full capacity — up from a cap of 50% last year — and four greenhouses outside booked far in advance.

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But staffing remains a challenge. In a recent survey of 3,000 U.S. restaurant operators, 77% said they didn’t have enough workers to meet demand, according to the National Restaurant Association, an industry trade group.

U.S. sales at restaurants and bars hit an estimated $73.7 billion in November, up 37% from the same month last year, according to preliminary data from the U.S. Census Bureau. But that was partly due to higher menu prices as restaurants try to account for inflation.

The Associated Press contributed to this report. This story was reported from Los Angeles.