‘It’s going to keep doors open’
Pandemic relief package offers lifeline to restaurants devastated by coronavirus
NEW YORK — Restaurants devastated by the coronavirus outbreak are getting a lifeline from the pandemic relief package that Congress approved Wednesday.
The legislation, which President Joe Biden will sign into law Friday, adds money to the Paycheck Protection Program and provides indirect help to small businesses through stimulus payments and unemployment benefits. But restaurants got the biggest share of direct help: $28.6 billion in grants for restaurants whose revenue fell in 2020 as a result of the pandemic.
The bill calls for grants equal to the amount of restaurants’ revenue losses, up to a maximum of $10 million per company and $5 million per location. Eligible companies cannot own more than 20 locations, and they can’t be publicly traded. The bill sets aside $5 billion for the smallest restaurants, those whose annual revenue is $500,000 or less.
Industry groups welcomed the grants. The National Restaurant Association, an industry organization, noted the Senate added $3.6 billion to the $25 billion allocated in the original House bill. While the $28.6 billion in the bill was only about a tenth of the amount of money the industry has lost during the pandemic, the restaurant group sees it as a win.
“It’s going to keep doors open. The smallest and hardest hit are going to get the help they’ve needed the most,” said Sean Kennedy, an executive vice president at the group.
Restaurants were decimated by the pandemic that led to government-ordered shutdowns and that is still keeping many diners away. As of Dec. 1, over 110,000 U.S. restaurants were closed either temporarily or permanently, according to the National Restaurant Association. That’s 17% of the number of restaurants in business before the pandemic. In January, industrywide revenue was down more than 16% from a year earlier, the group said.
Small-business advocates said the $1,400 stimulus payments to individuals and families as well as continued unemployment benefits will give consumers more money they can spend at small businesses.
“Anytime you’re putting money in the hands of consumers, regardless of how it gets there, it helps small businesses,” said Keith Hall, president of the National Association for the Self-Employed, noting that Main Street businesses like hair salons will likely benefit.
Congress added more than $7 billion to the $800 billion allotted to the latest round of the PPP that began Jan. 11. The Small Business Administration has approved about $680 billion in loans during this round, and a total of $1.2 trillion since April.
But small-business advocates are concerned because the bill did not extend the program, which is scheduled to end March 31. Congress can still extend the PPP — it previously passed extensions after two earlier rounds of funding ended — but Karen Kerrigan, president of the Small Business & Entrepreneurship Council, called the bill “a missed opportunity” for improvements to small-business pandemic relief.
Kerrigan was optimistic that the bill would have a positive effect on the economy and in turn, small businesses.
“We do anticipate an overall lift that helps to fuel the momentum and confidence that is building on Main Street,” she said.
Starbucks has employees at hundreds of busy locations strolling through car lines, taking orders with hand-held devices so customers can get their caffeine fix a few seconds faster. Shake Shack, which has long emphasized that quality ingredients are worth waiting a few extra minutes for, will soon feature its first drive-thru window. And the vast majority of new Chipotles this year will have “Chipotlanes,” where customers can drive up to a window and pull away with preordered meals in less than a minute.
With dining room restrictions in place for much of the country during the pandemic, drive-thru and pickup windows became critical ways for a variety of restaurants to remain afloat.
Now, as the dining industry looks toward a post-pandemic world, many companies are betting big that digital ordering and drive-thrus will remain integral to their success. And the basic experience of sitting in a single line of cars, speaking into a sometimes garbled intercom and pulling up to a window to pay for your food before driving away is poised to be demonstrably altered for the first time in decades.
A number of restaurants are moving quickly to improve their online order and app abilities, change their physical designs or add two or three drive-thru lanes. Some are testing artificial intelligence systems to tailor suggestions for individuals who pull up to the menu board.
“The drive-thru has been one of those places that hasn’t changed in decades,” said Ellie Doty, North American chief marketing officer for Burger King. “But with COVID, we’re seeing the dramatic acceleration of directions we were already going.”
Shake Shack is experimenting with a number of new designs and plans, including walk-up windows and curbside pickup. It will open its first drive-thru this year in Orlando, Florida, and plans five to eight more through 2022.
“We had started working on some of the formats even prior to the pandemic,” said Andrew McCaughan, chief development officer for Shake Shack. “But we saw a massive accelerator and catalyst to move faster and to get drive-thru really going.”
Drive-thru times average 4 minutes, 15 seconds, according to Bluedot, a geolocation company. Like a Daytona 500 pit crew, restaurants are always looking for ways to shave off minutes, or even seconds.
To be competitive in this race, Chipotle, whose digital orders soared from 20% of its sales to as high as 70% at the height of the pandemic, installed in many of its kitchens a second assembly line where employees put together tacos or burrito bowls for mobile and online orders exclusively.
The chain also expects that 70% of its restaurants that open this year will have the dedicated Chipotlanes for online orders.
“We’re trying to get our service time from when you pull up to the restaurant, pick up your food and drive off to 40 or 50 seconds,” said Jack Hartung, chief financial officer of Chipotle.