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Restaurant Sector May Struggle to Recover as States Reopen Economies

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States start making plans to reopen their economies. However, the restaurant sector may have a hard time recovering under recommended reopening policies.

Restaurants will face new expenses. These will include expenses on giving workers protective equipment as well as adjusting their shifts. It also includes expenses used on “implementing new cleaning and sanitizing standards,” said Fox Business. The expenses also cover “providing sneeze guards at cash registers,” Fox Business added. The Centers for Disease Control and Prevention (CDC) also made the proposal of asking establishments to use disposable utensils and menus.

A Shift in Operations

According to Erik Rosenstrauch, president and CEO of Fuel Partnerships, small businesses might have to shift part of their operations online. The problem is that many of them do not have the necessary technology incorporated into their services.

Another expense is that restaurants will be missing out on revenue. This is due to the fact that they will not be allowed to fill their establishments. “So while other costs remain the same, revenue will be a fraction of what a restaurateur relies on during normal economic times. And that’s following a months-long shutdown,” said Fox Business.

“You might just have some business owners saying … ‘I’m just not going to reopen,’” Rosenstrauch said.

Rocco DiSpirito, an award-winning chef and author, said that restaurants may be forced to raise prices. He says establishments may need to do so to compensate for their revenue loss. Restaurants are “short of some relief from the government or another source,” said DiSpirito. “I’m not sure how we’ll be able to open up at 25 percent capacity with the same basic expenses and not look for a way to fill that void somewhere,” he said.

Meanwhile, the Independent Restaurant Coalition has asked Congress for a stabilization fund. This fund would provide up to $100 billion in grants to help reopen restaurants.

“If we do not have funds to pay our vendors and the associated reopening costs, this will prove an insurmountable barrier to reopening our restaurants,” the group wrote in a letter. “With a $50-$100 billion reinvestment, independent restaurants would be able to navigate local and state closure mandates, hire back our employees, and survive for the future as patrons return to dining out in restaurants again.”

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