Skyrocketing infections and an impending second wave of shutdowns proves that reopening the economy won’t save the restaurant industry

louisiana new orleans coronavirus reopening restaurant bar

Coronavirus cases have been skyrocketing in recent weeks, and at least part of the increase can be attributed to restaurants reopening their dining rooms.
On Friday, Texas became the first state to partially reverse its reopening, and more shutdowns are on the horizon as cases continue to rise.
These shutdowns are necessary for public safety reasons, but will also spell disaster for beleaguered restaurants that already had the cards stacked against them.
The recent spike in coronavirus cases and impending shutdowns are proof that reopening businesses won’t actually save businesses.
To restaurants need decisive intervention from the government, including no-strings-attached grant funding and rent relief.
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When Georgia Governor Brian Kemp announced he’d allow restaurants to reopen on April 27, over 120 Atlanta restaurant owners united to commit to remaining closed, saying it was far too soon to reopen.

Now, Georgia is one of many states experiencing a spike in coronavirus cases, in what the WHO describes as a consequence of reopening businesses and public spaces too early. On Friday, Texas Governor Greg Abbott ordered all bars to close temporarily, reversing his previous decision to allow already-open businesses to stay open while pausing further reopenings. Florida, Arizona, and California are all among the states that have seen unprecedented positive test rates since reopening.

And on Friday, a Chase analyst released a chart showing the correlation between restaurant spending and new cases. The analyst, Jesse Edgerton, compared the spending data from 30 million Chase credit and debit cardholders against a coronavirus case tracker from John Hopkins University and found that restaurant spending was the strongest predictor of a rise in infections.

In the face of this new evidence, the stance that reopening restaurants is safe is becoming increasingly untenable. And it’s becoming more and more clear that not only is prematurely reopening restaurants unsafe, it’s bad for business.

Some argue that at least restaurants were able to make a profit by reopening, saving jobs and the economy. Broadly speaking, that hasn’t been true. Safety guidelines and capacity limits have made it nigh-impossible for sit-down restaurants to operate profitably.

When local governments inevitably wrangle restrictions back into place, the onus of dealing with that whiplash will fall on the shoulders of small business owners. Staying open as case numbers skyrocket puts restaurant workers and customers at risk. But the financial consequences of closing back down are yet another unknown for restaurant owners. Congress has been dragging its feet on passing another stimulus package, and restaurant owners have no idea what kind of support they will or won’t receive from the government if they’re forced to close again.

A second round of closures will also toss supply chains, carefully rebuilt after months of turmoil, into further uncertainty. It will have a devastating secondary effect on restaurant suppliers, who must continually adjust to massive fluctuations in demand much faster than they’re able to. An example of this phenomenon is the cheese supply chain. Restaurant owners are now facing high prices and shortages …read more

Source:: Business Insider


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