How Local Governments are Helping Restaurants Survive

The COVID-19 pandemic has been devastating for the restaurant industry, permanently shuttering 17-percent of restaurants nationwide, and revealing inequities and vulnerabilities baked into the foundations of these businesses. At the James Beard Foundation, we’re looking forward with optimism, while also striving to provide resources and tools to help the industry recover and rebuild with equity and sustainability at its heart.

Below, director of policy advocacy and sustainability at the James Beard Foundation Alexina Cather speaks about the state of the industry and gives resources to help survive this crisis.
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Despite the independent restaurant industry’s notoriously low profit margins of three to four percent, many restaurant owners have found a way to survive the COVID-19 pandemic. However, these same restaurants are now faced with labor, supply chain, and inflation crises, on top of the extremely contagious Omicron variant—without any federal support in sight. The combination of Omicron’s rapid spread and the lack of national rules and guidance is forcing restaurant owners and workers to weigh health and safety against finances.

A survey conducted by the Independent Restaurant Coalition (IRC) in January of 2022 asked nearly 1,200 members of the independent restaurant and bar community if they were at risk of closure. Eighty percent of respondents who had not received money from the Restaurant Revitalization Fund reported that they are at risk of permanent closure without federal financial assistance. These statistics reinforce findings from the survey that we conducted at the end of last year. When respondents were asked if their business would survive the winter, 50 percent reported no confidence to moderate confidence, suggesting that independent restaurants across the country are still at risk of closing. Additionally, the top three challenges respondents reported were: staffing, higher operational costs, and lower revenue.

Yet despite these statistics and Senator Elizabeth Warren’s (D-MA) recent call to replenish pandemic restaurant aid by passing Bill S.2091, the Restaurant Revitalization Act of 2021—introduced in June of 2021 by Senator Kyrsten Sinema (D-AZ) and currently co-sponsored by 42 members of Congress—there is still no real progress on more federal relief.

At the James Beard Foundation, we are following policies being enacted at the municipal and state level to financially help restaurant owners, operators, and staff. These policies might already be on the docket in your city or state, or your representatives might need a push (and will appreciate seeing how others have done it) from restaurant owners, workers, and diners. Here are a few local and state policies that might prove particularly replicable in other locations:

• CA Senate Bill 314 allows for outdoor dining expansion with alcohol service and makes it easier for multiple licensed businesses to share commercial space with other businesses.
• Boston created a three-month pilot to offer $5,000 grants to cover any business-related expense to support restaurants and workers.
• Lawmakers in many states, including Arizona, Arkansas, Kansas, Nebraska, and West Virginia have passed legislation to permanently allow restaurants to sell cocktails to-go.
• Massachusetts House Bill 90 enacted temporary changes to the rate employers contribute to the unemployment insurance trust fund. These additional funds provide for COVID-19 emergency paid sick leave.
• NY State Senate Bill S. 6256-A/A. 7757 will grant new temporary manufacturing permits to allow New York State wineries, breweries, cideries, and distilleries to serve customers while they await final approval on their manufacturing license.
• NY State Senate Bill S.2743/A.3909 will allow temporary liquor licenses for bars and restaurants opening in New York City, allowing for increased revenue streams.
• NY State Senate Bill S.64/A.1524 establishes a Restaurant Meals Program as part of the Supplemental Nutrition Assistance Program (SNAP). The bill will allow homeless, elderly, and disabled SNAP recipients to use their benefits to purchase prepared or hot food directly from participating restaurants statewide. Governor Hochul also launched a $25 million Restaurant Resiliency Program (RRP) to build on the Nourish New York initiative. RRP will provide funding to food banks and emergency food providers to purchase prepared meals from New York restaurants and deliver them to families experiencing hunger and food insecurity.
• Washington, D.C. Bill B24-0038 temporarily prevents third-party meal delivery platforms from delivering meal orders from a restaurant without first obtaining an agreement with the restaurant authorizing the transaction.

Some of these policies allow for the creation of alternative revenue streams. Look to our Open for Good: Business Innovation Models, made in collaboration with Deloitte, for more inspiration on how various restaurant owners pivoted their business models and how they plan adjusting in the future.

To our hospitality industry community: did we miss something that your local or state government is doing? We’d love to hear from you. Please send us an email to let us know what is happening in your community. 
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Alexina Cather is the director of policy advocacy and sustainability at the James Beard Foundation. Find her on Instagram and Twitter.