The $1.9 trillion stimulus bill was called the American Rescue Plan by President Joe Biden. Few sectors of the economy were helped as much as the restaurant industry, which was given a much-needed lifeline.
So said Mark Wasilefsky, head of the Restaurant Franchise Finance Group for TD Bank.
Wasilefsky said the approximately $30 billion in aid that has been appropriated for the industry will be a great help to the restaurants that have managed to hang on during the pandemic. The industry has lost more than 100,000 restaurants, according to the December report of the National Restaurant Association.
“We have seen restaurants continue to struggle even more during the cold winter months, with consumers fearing the spread of the virus during flu season and feeling hesitant about eating indoors at locations that did not offer outdoor dining,” he said. “Hopefully, this aid will provide a boost to many restaurants and to their customers who are currently struggling and lead to a more profitable spring for the industry as more people are vaccinated and feel comfortable visiting restaurants.”
Gov. Phil Murphy announced that restaurants can increase their indoor dining capacity to 50% beginning Friday. Many feel a further increase in capacity may come by the end of the month.
Wasilefsky said restaurant owners are still working to pivot operations to bolster consumer confidence in their health and safety and remain profitable.
According to TD Bank’s 2020 Restaurant Franchise Pulse survey of more than 250 restaurants across the country, 72% of restaurant owners and operators reported implementing enhanced delivery and online/mobile ordering in response to the pandemic. Restaurants have proven their ability to quickly adapt to keep employees and customers safe, including:
- Going beyond cash: Almost half (42%) of the survey respondents began accepting nontraditional payment methods;
- Staying in the car: 38% of respondents have added drive-thru capabilities for customers.
Wasilefsky said many restaurants have shown an ability to pivot their models — something he feels they will need to continue to do moving forward.
“The pandemic has truly shown us the creativity of restaurant owners and operators,” he said. “Due to COVID-related restrictions, we’ve seen restaurants adjust their operations by enhancing their online and mobile ordering, adding and/or expanding their drive-thru capabilities and tailoring their menus to food that travels well.”
Wasilefsky said the TD Bank survey showed delivery and online ordering now account for a larger percentage of sales — increasing from 20% in 2019 to 39% in 2020.
“With restrictions easing, restaurants should consider these off-premise sales to be incremental opportunities, and something to be preserved and, in fact, grown as they add to more conventional revenue through increased foot traffic and growing indoor dining capacity,” he said.
“As warm weather bridges the industry to when a majority of the population will be vaccinated, the combination of these new sales avenues and the return of conventional in-room dining will allow the clever and resourceful to gain market share from surviving competitors and supply reductions resulting from those that have permanently closed.”