Economy

Shake Shack Founder: No Stimulus A 'Crushing Blow' For Eateries

Restauranteur Danny Meyer, CEO of Union Square Hospitality Group and founder of Shake Shack, said there is likely to be large-scale economic damage without more financial aid to combat issues related to the pandemic, CNBC reported.

Meyer, speaking with CNBC on “Closing Bell,” said President Donald Trump's statement that his office wouldn't negotiate for any more stimulus efforts until after the election would be a "crushing blow" for restaurants.

“I think that the country needs to understand that this is an industry with 600,070 members,” he said during the program. “We are too broad to fail. We’re not like the auto industry or airline industry, where you can get your arms around just a small handful of carriers.”

He said this would especially be true once the weather gets colder in the winter, which will make it harder to dine outdoors as has been a tradition during the pandemic thus far.

Yelp data as of Aug. 31 showed that 32,109 restaurants in the United States had closed during the pandemic. Sixty-one percent of those were classified as permanent closures, CNBC reported. The number of people working in restaurants was at 12.3 million in February, but it dropped drastically by April to around 6.2 million. By September, the number was back to almost 10 million.

But Meyer, who operates venues in New York City like the Union Square Cafe and Gramercy Tavern, told CNBC that many people won't be hired back unless the restaurants can reopen. He called restaurants the "psychological and emotional fabric of communities" and said many are still only hanging on.

Meyer's warning echoes that of Landry's CEO and chairman Tilman Fertitta, who also offered words of caution this week, saying he is unsure Congress understands the gravity of people's plights without more money as the pandemic continues.

Meanwhile, New York City is seeing a 40 percent spike in bankruptcies as the pandemic continues. That's coming from more coronavirus infections, the lack of financial aid, people staying home, and further potential restrictions that will choke revenue even more.

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