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Below is a brief excerpt from a complimentary research note written by our Consumables analysts Howard Penney and Daniel Biolsi. We are pleased to announce our new Sector Pro Product Consumables Pro. Click HERE to learn more. |
The status of the coronavirus-relief package and any possible modifications are uncertain after President Trump’s criticism.
The $900B aid bill does not include any targeted aid for the hospitality industry despite losing millions of jobs. In comparison, the airline industry would receive $16B in assistance, and movie theaters and concert venues would receive $15B in grant money.
The Paycheck Protection Program would offer more preferential loan terms to the hospitality industry. The new rules favor smaller businesses for forgivable loans and provide a larger borrowing amount for bars and restaurants while also making public companies ineligible.
Only 8% of the previous PPP funds went towards restaurants, mostly because it required at least 60% of the proceeds to be spent on payroll. Many restaurants survived the pandemic by operating take-out or outdoor dining on reduced staffing levels, not full staffing.
One new provision for restaurants is the insertion of the three-martini lunch – a full tax deduction of the value of business meals (instead of 50%), which should boost urban restaurants catering to the business crowd when office workers return to work.
Independent restaurants continue to be challenged by the pandemic and restrictions on dining. The competitive environment is bound to have fewer restaurants when the recovery begins.
