The Window for PPP Loans Has Closed
SBA grants update. The Small Business Administration said Tuesday that it is no longer accepting applications for the paycheck protection program, which offered forgivable loans to small businesses hard hit by the coronavirus pandemic. Existing applications will continue to be reviewed through the end of the month. The program, created in last year’s stimulus legislation, has made $799.8 billion in loans to more than 8.5 million small businesses. “I’ve heard story after story from small business owners across the country about how PPP funds helped them keep the lights on, pay their employees — and gave them hope,” SBA Administrator Isabella Casillas Guzman said. PPP loans were designed to help small businesses pay their workers’ salaries as well as rent, mortgage interest and utility costs. The loans were to be forgiven if they went for wages. New Jersey has more than 861,000 small businesses, the 11th highest in the U.S., according to the state Business Action Center.
Starved for Relief: Restaurants Seek $76B
Far more than budgeted. The Small Business Administration is dishing out rent relief to restaurants, but many figure to go hungry. The demand for federal pandemic relief has far exceeded the amount of money available, so some restaurants, bars and other food businesses might not receive it, the New York Times reported. The Small Business Administration received more than 372,000 requests totaling $76 billion, but the Restaurant Revitalization Fund is capped at $28.6 billion, the publication reported. More than 208,000 applications from businesses owned by women, veterans and minorities that meet a certain income and asset limit will be funded first, the publication noted.
Family Dining Looks for Transformation
After 2020’s struggles. The sector’s biggest players indulged in considerable reinvention attempts as they felt the loss of breakfast and particular challenges at off-premise. Anyone who doubts the pandemic has permanently changed the restaurant business need look no farther than the family dining segment to realize how wrong they are. Problems that eroded traffic in that market for years—if not decades—festered into critical threats when dining rooms were closed and often-fanatical fans were advised by government authorities to stay home. Few of the all-day concepts enjoyed a robust off-premise business at the time and sheltering at home was particularly impactful for a sector known to have an older clientele, a cohort particularly vulnerable to the worst COVID-19 could do. Part of the reason Cracker Barrel Old Country Store replaced the rocking chairs on its porch with dining tables in 2020 was the expectation its senior fans would feel safer eating outdoors.
Bielat Santore & Company – “Restaurant Rap”
This Week’s “How Ya Doin” Interview Series. As the lock down kept businesses closed, Bielat Santore & Company initiated its “Restaurant Rap” series. That series presented recorded virtual video interviews with local restauranteurs and other industry professionals, many of whom were the firm’s clients, customers, and associates. The interviews focused on the challenges and obstacles business owners were facing during the early stages of the pandemic. Now, a year later, Bielat Santore & Company is checking back with those same professionals and asking…”How Ya Doin?” Watch this week’s featured interview with banker, Andrew Glatz, head of SBA Lending at Peapack Gladstone Bank.
Restaurants Raising Prices Across the Country
Due to inflation. Inflation is now hitting small restaurant owners and franchisees alike after more than a year of COVID-19, and it’s leading many to raise the prices of menu items. “Come the middle of the summer, the stormy water settled a bit, but that has kind of gone out the window,” Alan Natkiel, owner of Georgia’s Northside restaurant in New Hampshire, told Fox News. “…Just recently — really within the last month — things have started to go upside-down again.” “Where there’s smoke, there’s fire, and financially, it was blazing,” he said of recent costs, including grocery bills that are 25% higher than average. Inflation across all items has grown to 4.2% over the last 12 months — the largest increase since 2008 — according to the Bureau of Labor and Statistics’ Consumer Price Index Summary released May 12.
Hotels Vacant Without Workers
We need help. We need help right away. That was the plea from Bhavesh Patel, president of ADM Hotels and chairman of the New Jersey Restaurant & Hospitality Association, who presented during a recent New Jersey Business Coalition town hall about the hiring crisis that has left countless hotel rooms across the state unnecessarily vacant. “We have been hit the hardest throughout this whole pandemic,” Patel said. “Last year… hotels were considered essential, and we kept our doors open, but many, throughout the course of last year and this year, had to shut their doors because we just couldn’t find the staff to man our properties.” Patel said incentives are needed if workers currently enjoying expanded unemployment benefits are going to be coaxed back to work. But it’s not just the hospitality industry that will suffer. With the summer season already underway, Patel said he fears the inability to staff hotels will have a dramatic impact on New Jersey’s tourism as well.
Radical Reconsideration and the Behavior Change Opportunity
For restaurants. Restaurants ranked as one the most dramatically impacted sectors of the economy during the pandemic, right up there with airlines, hotels, gyms and movie theaters. A year later, we see the promise of accelerating vaccination rates, and the lifting of crippling capacity restrictions imposed on restaurants. While we all know in-person dining will return in force (I personally can’t wait to get back to my favorite spots), the tectonic shifts we saw in the industry aren’t going to magically reverse themselves. Consumers are already living in the next normal, and operators need to be ready to keep pace with guest expectations that have permanently shifted. I’m not alone in arguing COVID-19 has merely served as a great accelerator of changes that were already underway. Tech companies were leading the way in flexible schedules and remote working arrangements to retain Millennial and Gen Z employees, now every industry knows firsthand that it works. My mom might love JCPenney, but even she knew pre-pandemic that many of her bricks-and-mortar retail faves were going down the tubes. The movie business was already being seriously disrupted by the likes of Netflix, Amazon and Apple. Then the pandemic blew up the old distribution model once and for all, as first-run movies started premiering in our living rooms. Nobody’s going to put that toothpaste back in the tube.
Delivery Apps Are Making Concessions to Restaurants
But who pays? As restaurants ditch third-party delivery apps, companies like DoorDash and Grubhub are creating more incentives for small businesses. Nossa, a southern Brazilian restaurant in Los Angeles, opened in January when the city was still in lockdown. At that time, offering food to go was the only option, and director of operations Xandre Borghetti was happy to use big delivery companies to support the business’s launch. “During the pandemic, I was talking to every single restaurant person I know across the industry, and I said you should always be optimizing for delivery, and you should always be thinking about diversifying revenue streams,” he said. “And I still stand by that. But when I step back and look at the bigger picture, I’ve seen from an operational standpoint that it’s not quite that easy.” Borghetti turned off DoorDash at Nossa a month ago. With two patios and indoor dining capacity that has expanded over the past month, the restaurant doesn’t need delivery right now. On a busy night, Nossa serves about 150 customers and is getting busier every week, Borghetti said. Plus, dine-in guests, fresh from a year spent literally outside of restaurants, spend more money than those who order food to go.
Tough Pandemic Decisions
Are starting to pay off. Small business owners have had to make a lot of tough decisions throughout the pandemic. Restaurant owners, for example, have had to cut staff, reduce hours, or, in a lot of cases, shut down. For the restaurants that have survived, a lot of those changes made their businesses more efficient. And now that the economy’s been coming back, a lot of those tough decisions are starting to pay off. At 21st Amendment Brewery in the San Francisco Bay Area, customers can sit down at a table, scan a QR code with their phones, and order beers and food immediately. “They don’t have to wait to be approached by a server,” said co-founder Nico Freccia. “They don’t have to wait for somebody to come over and give them specials.” Now, Freccia said, he’s planning on running his big, outdoor events the same way. “You need less staff,” he explained. “People feel safer, because they’re not passing around money and touching things that other people are touching. They don’t have to wait in line instead of being able to drink beer.”
Did You Know?
92% of restaurants could not make December rent. The situation for New York City’s restaurateurs — and their landlords — got even more dire at the end of 2020. A new report by the New York City Hospitality Alliance found that 92 percent of restaurants could not pay their full December rent, the highest that number has been since the pandemic began. That number has also increased every month during the health crisis; in June, 80 percent of restaurateurs couldn’t afford rent, and it’s steadily risen since. Of those who could afford some rental payment at the end of 2020, just 49 percent paid half of their rent, while 28 percent paid less than half.
The real reason employers can’t hire enough workers. As life in the United States tiptoes back toward something resembling Before Times, many employers are facing an unexpected problem: they can’t hire the workers they need. Despite unemployment numbers in the millions, some 8.1 million job vacancies remain. This problem is concentrated among America’s low-wage workforce, hitting restaurants, warehouses, manufacturers and the service industry. This should be a wake-up call for a country that has spent decades mistreating, neglecting and radically underpaying its workers.
Bielat Santore & Company – Restaurant Industry Daily Alerts
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Bielat Santore & Company Sells Simko’s – Neptune, New Jersey
On March 28th, two days after owner Mike Simko signed a contract to sell his restaurant located at 1311 Highway 35, Neptune, Monmouth County, New Jersey, “straight-line winds” of around 70 mph ripped through his neighborhood leaving scattered debris, downed utility poles and wires, and damaged vehicles in its wake. The fast-moving storm caused some destruction to Simko’s restaurant but did not blow away his deal. According to Richard Santore of Bielat Santore & Company, Allenhurst, New Jersey, the broker for the sale, the real estate at 1311 Highway 35, Neptune has been sold to a real estate investor and the restaurant business itself sold to an independent restaurant operator.