Grocers Stand to Benefit Further With Foodservice in Freefall

Press enter to search
Close search
Open Menu

Grocers Stand to Benefit Further With Foodservice in Freefall

By Mike Troy - 12/14/2020
Grocers Stand to Benefit Further With Foodservice in Freefall Prepared Foods
Food retailers with robust foodservice operations are poised to experience strong Q1 sales as restaurants continue to see steep declines.

The nation’s food retailers could be looking at strong first-quarter sales if results of a recent survey conducted by the National Restaurant Association (NRA) are accurate.

The Washington, D.C.-based trade group found that 87% of full-service restaurants, including chains, franchises and independents, reported an average revenue decline of 36%, and 83% of full-service operators said that they expect an even worse decline in the next three months. Fifty-eight percent of chain and independent full-service operators expect continued furloughs and layoffs for at least the next three months.

“What these findings make clear is that more than 500,000 restaurants of every business type — franchise, chain and independent — are in an economic free fall,” Sean Kennedy, NRA’s EVP for public affairs, wrote in a letter to congressional leadership. “And for every month that passes without a solution from Congress, thousands more restaurants will close their doors for good.”

The dire assessment is based on a survey of 6,000 restaurant operators and 250 supply-chain businesses conducted by the National Restaurant Association Research Group Nov. 17-30. It is the fifth such survey conducted of NRA membership since the pandemic began.

As of Dec. 7, NRA said that 17% of restaurants — more than 110,000 establishments in total — were either closed permanently or long-term. On average, these restaurants had been in business for 16 years, and 16% had been open for at least 30 years. Only 48% of the former restaurant owners said that it was likely they would remain in the industry in any form in the months or years ahead.

“In short, the restaurant industry simply cannot wait for relief any longer,” wrote Kennedy in the letter to congressional leadership. “We appreciate the efforts of a group of moderate members of the House and Senate to advance a true compromise between the competing proposals from Democratic and Republican leaders. If this moderate plan represents a ‘down payment’ for a larger relief package in early 2021, it will provide restaurants with immediate relief to hold on through the most dangerous point in our business year.”

In addition to support of the compromise proposal, the association provided a plan for how a proposed second draw from the Paycheck Protection Program (PPP) could be strengthened to reflect the unique business model of the restaurant industry and highlighted other important measures in the proposal that would support restaurants in the short term.