Jan 10, 2022 - Business

Independent restaurants pushed to the brink

Illustration: Aïda Amer/Axios

Multiple waves of federal pandemic relief have not stemmed the tide of local, independently owned restaurants closing.

  • The onslaught of the Omicron variant is exacerbating a sector of the hospitality industry already pushed to the brink.

The latest: In response, Nashville Mayor John Cooper last week joined mayors from across the country in backing the Independent Restaurant Coalition and begging Congress to put more money toward a pandemic-era program that offers struggling restaurants a financial lifeline.

Why it matters: Cooper and the other mayors said in a letter to congressional leaders that if the Restaurant Revitalization Fund isn't replenished soon, "86% of independent restaurants and bars that didn’t receive grants risk permanently closing."

In a statement to Axios, Cooper says the pandemic is continuing to "wreak havoc" on locally owned independent restaurants, which he says are "critical elements of every neighborhood in Nashville."

  • "These entrepreneurs have struggled to hang on and do the right thing," Cooper says. "Federal assistance is needed to support jobs and help restore this vital sector of our economy."

By the numbers: Of the 3,785 Tennessee restaurants that applied for the Restaurant Revitalization Fund, only 1,163 got grants, according to Michael Shemtov, a local restaurant owner who serves on the board of the Independent Restaurant Coalition.

Between the lines: Shemtov owns Butcher & Bee and Redheaded Stranger. He tells Axios that getting funding for Butcher & Bee gave him the flexibility to raise worker pay and absorb losses on low-traffic nights.

What he's saying: "I have an advantage that they don't have," Shemtov says. "There's nothing that feels fair about it."

  • "A lot of the places that add character to a neighborhood are at risk," he added. "We're getting close to the end of the line for many of them."

The big picture: Shemtov says getting Republican support for more restaurant funding could be a pivotal part of pushing the effort forward, particularly in the closely divided U.S. Senate.

  • Senators Marsha Blackburn and Bill Hagerty were both critical of the Democratic-driven American Rescue Plan.
  • In a statement, Blackburn pointed to more than half a billion dollars in unallocated relief funds. She said Congress should use that "to help businesses — like restaurants, live venues and gyms — that have been severely impacted through no fault of their own."
  • Hagerty spokesperson Judd Deere tells Axios the senator supported "a bipartisan, committee-driven process to identify where government spending may be needed, especially with small businesses and restaurants."

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