The restaurant industry, hit hard by the effects of the coronavirus, has lost $120 billion in the first three months of the pandemic, reported the National Restaurant Association. The organization said its research indicated the industry’s losses are likely to keep rising and will total about $240 billion by year’s end.
The restaurant trade group, in a news release, said that sales rose some in May as opposed to the height of the pandemic in April, but many restaurants still aren't turning a profit and some are considering leaving the business.
In a survey of over 3,800 restaurant operators, the association found that 76 percent of the restaurants that actually stayed open have rehired at least some staff. But many who permanently closed businesses say they’ll likely exit industry for good.
About 2.5 million jobs were added in the U.S. in May overall, with around 1.5 million being in the restaurant sector, QSR reported.
The association's stats found that 25 percent of the restaurants that temporarily closed due to the pandemic have rehired staff and are planning to reopen. That should be aided by the recent addendums to the Paycheck Protection Program (PPP), which extended the deadline restaurants had to use their money and still get the loans forgiven.
Restaurant industry experts said the original deadline was too restrictive, and some restaurants might have just given up the funding as they wanted to avoid costly loan repayments in the future.
Another rule change allowed for restaurants to only spend 60 percent of the PPP loans on paychecks instead of the 75 percent originally stipulated, which advocates said provided more flexibility that could let locations stay open in the long run.
The problems facing restaurants now will come from reduced capacity, as companies everywhere have to work to help reduce the chance of coronavirus infections while still trying to draw a profit. But despite the handicaps, dining is starting to show signs of a recovery in the U.S., down only 65 percent from a year ago on June 12 and 13, an improvement from the near-100 percent decline in April.