Dive Brief:

• Over 86% of restaurant and bar owners believe they will close without a Restaurant Relief Fund grant, a survey from the Independent Restaurant Coalition emailed to Restaurant Dive finds. This marks a 4% jump in operators who reported the same belief in September. 
• Nearly one in five restaurant owners report having their credit scores reduced below 570 during the pandemic, meaning they cannot take on any more loans, including from Small Business Administration programs.
• This mounting restaurant debt comes as the cost for goods continues to rise and wages spike, with labor costs at their highest level in 20 years.

Dive Insight:

The IRC has been lobbying for additional RRF grants for months. Operators' cost and debt pressures are even more challenged now, too, due to rising consumer anxiety over the COVID-19 omicron and delta variants. Sixty percent of consumers changed their dining habits because of the COVID-19 delta variant, per National Restaurant Association research, and restaurant sales dropped in August from July due to the variant, according to Black Box Intelligence.

Some chains, including McDonald's, even re-closed their dining rooms because of the delta variant — a move most independents can't afford to make because they don't have drive-thrus. Omicron has also impacted confidence in the industry, and 69% of restaurant owners are strongly concerned about the variant's effect on their recovery.

Recovery has already been rocky at best — 41% of restaurants could not pay their October rent, according to Alignable. Unlike chain restaurants that have access to deep-pocketed corporations, independent restaurants typically don't have the cash on hand needed to stay on top of rent when sales dip. As such, recovery has looked very different for small operators that continue to struggle, while many big chains report two-year sales growth.

An RRF refill could be one of the only solutions left for struggling independents who no longer have the credit rating necessary to qualify for SBA programs. The IRC notes that nearly 200,000 restaurants didn't receive an RRF grant in the program's first and only round, and just 101,004 of the 500,000 independent establishments that operate in the U.S. landed funding.

"Our elected officials did not adequately fund this wildly successful grant program and now time is up for thousands of restaurants and bars who applied and did not receive relief," IRC Executive Director Erika Polmar said in a release. "Congress must act swiftly and decisively to refill the Restaurant Revitalization Fund and save small businesses that will soon close in every state."

The IRC isn't alone in its call for an RRF refill. The NRA has also asked Congress to take action before the winter, when indoor dining may take a hit from anxious consumers not wanting to take the risk. Currently, the RRF remains empty and no further action from Congress is expected at this time.