A study conducted by the Iowa and National Restaurant Associations confirms the fears about the impact of COVID shutdowns on the industry.
The president of the Iowa association, Jessica Dunker, says the pandemic has been devastating to the industry. She says they entered 2020 with the hope of $4.4 billion in revenue and they are now expecting to lose $1.4 billion dollars — with the average restaurant seeing a 33% decrease.
Dunker says that’s not the end of it for the more than six-thousand restaurants, bars, and other venues that serve food and beverages. “The frightening thing is that 88% of Iowa operators expect to see an even bigger decrease in sales over the next three months,” she says. Dunker says winter will shut off the outside dining that has helped some businesses continue to operate.
You may go by some establishments and see long lines at their drive-throughs. Dunker says they are the ones that have been able to deal with the pandemic restrictions.
“We feel like any restaurant that had a drive-through in place when the COVID measures started to be put in place by the state had a tremendous advantage. And many those are actually seeing increases in sales this year,” according to Dunker. “So, when we talk about these kinds of loses — the drive-throughs are doing fine — and the people that were always set up as a carry-out and delivery, they are doing fine.”
Dunker says the COVID restrictions have hurt the establishments that offer an experience. “It really about the ambiance, the environment, as well as food that presents beautifully when you serve it straight from the kitchen. Those are the people who were not able to turn their business model quickly into something that would transfer for carryout and delivery,” she explains.
She says 61% of people surveyed say they are looking for an experience when they eat out. Dunker says they predicted early on they might lose one-thousand restaurants.
“We started out hoping that we were wrong — that it wouldn’t get to a thousand. Now we hope that our numbers are right and it will only get to a thousand,” Dunker says.
The Iowa Restaurant Association has joined thousands of small business advocacy organizations across the nation calling for the Federal Government to immediately pass a relief bill which includes additional Paycheck Protection Program grants.
Dunker says they are also asking state agencies and lawmakers to create relief measures including directing additional CARES Act money toward small business grants, forgiving and/or deferring sales and payroll taxes, and giving a minimum of one year respite on alcohol and other state license fees.
“Forty-one percent of operators say they don’t see how they can stay in business for another six months if federal programs aren’t renewed,” she says. Dunker is encouraging operators across the state to contact state and federal lawmakers throughout December and invite them to visit their businesses to see firsthand the toll COVID-19 has taken.