Don’t Make Restaurants Scapegoats, Trade Association Tells US Governors

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The Washington, DC-headquartered National Restaurant Association sent a letter to the National Governors Association (NGA) on November 17 noting there is no scientific evidence linking restaurants to the increase in Covid-19 cases in the United States and urging them to consider policies and regulations that will enable the foodservice industry to safely serve their communities for the duration of the pandemic.

The action came after a number of state governments began reducing the operating hours of restaurants and bars or, in some cases, implementing shutdowns of on-premise dining. Partial shutdowns have been ordered in Michigan, Washington and parts of California.

This has happened while to date, there is no evidence that a systemic outbreak of Covid-19 caused by the novel coronavirus (SARS-CoV-2) that originated in China is coming from the hundreds of thousands of restaurants around the United States that operate within the trade association’s COVID-19 Safe Operating Guidance and follow the guidelines of local public health safety regulations.

The letter noted that restaurants have enhanced the Food and Drug Administration (FDA) Food Code practices with the association’s guidance to require face coverings for staff, request face coverings for guests, add more frequent hand sanitizing, provide guests with hand sanitizers, and increase frequency of cleaning and sanitizing high-touch surfaces. Operators also updated floor plans to ensure social distancing of at least six feet between guests while in a restaurant.

“There is an unfounded impression that restaurants are part of the problem, and we are suffering as a result of inconsistent, restrictive mandates,” said Tom Bené, president and chief executive officer of the National Restaurant Association in the letter. “Data tying systemic community outbreaks of Covid-19 to restaurants has yet to emerge, but we are too commonly labeled as ‘super-spreaders,’ and have become a convenient scapegoat for reflexive shutdowns.”

As governors determine whether socially facing businesses like restaurants should be closed or scaled back, the National Restaurant Association urged them to take the following suggestions into consideration:

  • Regulations and decisions regarding restaurant operations that are based on facts and contact-tracing data, not hypothetical simulations of transmission.
  • When restrictive regulations are imposed, such as capacity restrictions or shutdowns, it should be clear what health metrics must be achieved to return to the previous level.
  • Restaurant operations should be treated the same as other retail establishments. Shutting down indoor dining should be considered a last option.
  • If a shutdown is mandated, restaurants should be recognized as essential businesses and remain open for off-premises sales (e.g., takeout, delivery, and drive-through), as well as outdoor dining.
  • Restaurants should receive as much advance notice as possible of changing regulations.

The full letter to the National Governors Association is available to read here.

Discouraging October Sales Figures

Meanwhile, restaurant sales in October declined for the first time since the spring lockdowns, with total pandemic losses reaching $215 billion through the month. According to preliminary data from the US Census Bureau, eating and drinking establishments registered sales of $55.6 billion on a seasonally-adjusted basis in October, which was down from September’s volume of $55.7 billion.

October represented the first monthly sales decline since the end of the spring lockdowns. After plunging to just $30 billion in April, monthly sales at eating and drinking places rebounded to top $55 billion in both September and October. Despite the growth, sales remained nearly $10 billion – or 15% – below their pre-coronavirus levels in January and February.

October’s sales decline is a troubling sign for the industry, as the month likely included some of the last opportunities for outdoor dining in many parts of the country. Factoring in the indoor dining restrictions that are currently being reimposed in some jurisdictions, it becomes clear that the winter months will represent an extremely challenging period for restaurants that rely on on-premises business.

While the seasonally-adjusted figures offer a directional look at spending trends from month to month, they don’t provide a complete picture of the sales losses that have been experienced by restaurants during the coronavirus pandemic. For this, the Census Bureau’s unadjusted data set is a better measure, because it represents the actual dollars coming in the door.

In total between March and October, eating and drinking place sales in the USA were down nearly $175 billion from expected levels, based on the unadjusted data. Add in the sharp reduction in spending at non-restaurant foodservice operations in the lodging, arts/entertainment/recreation, education, healthcare and retail sectors, and the total shortfall in restaurant and foodservice sales likely reached $215 billion during the last eight months.

Eating and drinking places are the primary component of the US restaurant and foodservice industry, which prior to the coronavirus outbreak generated approximately 75 percent of total restaurant and foodservice sales.