60% of restaurants are currently in debt, while only 34% were in debt before the start of the first Shelter in Place order in March 2020.
SAN FRANCISCO (PRWEB) April 27, 2021
San Francisco based non-profit advocacy organization and direct service provider SF New Deal surveyed 106 San Francisco restaurants in March 2021 to understand the economic situation facing the industry. A year into the pandemic, the survey found that though partial restaurant reopening is taking place and some government aid has been made available, the number of restaurants facing debt as well as the amount of debt has increased significantly. 60% of restaurants are currently in debt, while only 34% were in debt before the start of the first Shelter in Place order in March 2020. On average, debt increased from $62,000 to $114,000, nearly doubling the amount.
Restaurants are finding it increasingly difficult to pay rent. While some restaurants have received some form of rent relief, 39% of restaurants are currently behind on rent. About half of those restaurants are more than 5 months behind in rent.
"These survey findings help us to understand the financial challenges ahead for our restaurant partners who currently receive income through SF New Deal’s programs," said Lenore Estrada, Executive Director of SF New Deal. “The economic situation is even more dire for small businesses overall who do not have access to supplementary revenue streams from community feeding programs. We remain committed to advocating for long term support from government agencies to ensure an equitable recovery for all small business owners."
Though partial reopening has begun, revenue deficits remain. Today, 40% of restaurants continue to report monthly losses. A sampling of 106 restaurants shows a collective $7 million revenue loss per month from the local economy. Extrapolated out to San Francisco’s more than 4000 restaurants, this reflects a $291 million dollar loss from the city’s overall economy.
Reduced revenue in local restaurants has led to layoffs and job cuts across the industry. More than 80% of restaurants have reduced the number of employees on payroll since March 2020. 64% of restaurants were forced to cut more than half of their workers. In total, 60% of workers lost their jobs.
While small business loans through the Paycheck Protection programs (PPP), California Small Business Relief Fund and the COVID-19 Economic Injury Disaster Loan are available, the loans are not enough for restaurants to sustain their business through the pandemic. 88% of restaurants received loans but restaurants report that loans can only sustain less than half of a year of operations.
Recovery appears daunting and uncertain for small businesses. 63% of restaurants expect recovery will take up to an entire year. More than a third of restaurants expect recovery to take years.
Since March 2020, SF New Deal has provided immediate support to the restaurant industry at a time of unforeseen and significant need. Over the past year, SF New Deal has disbursed over $20,000,000 directly to small businesses. This money has supported 184 businesses, helping them keep their doors open and fuel San Francisco’s local economy and simultaneously provide 1,867,195 meals to neighbors in need.
Currently, revenue from SF New Deal’s feeding programs is a significant source of income for restaurants, accounting for about 40% of restaurant partners’ monthly revenue. Through restaurant partnerships with SF New Deal, restaurants were able to bring back employees, recovering 32% of lost jobs since the start of the pandemic.
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SF New Deal conducted a survey in March 2021. Survey findings reflect the responses from 106 San Francisco based restaurants, which represents 80% of SF New Deal’s currently active restaurant program partners.
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About SF New Deal
SF New Deal provides supportive services and financial opportunities for small businesses in San Francisco. SF New Deals works to address both the symptoms and root causes of inequity by building pathways which connect local business owners, workers, community leaders, and neighbors in need, for the benefit of the entire city. In the last year, SF New Deal was awarded a FEMA Citizen Service Corp Award, a certificate of recognition from California State Assembly Members Phil Ting and David Chiu and a Certificate of Honor from the San Francisco Board of Supervisors in recognition of its response to the COVID-19 public health crisis and its outstanding service supporting small businesses and addressing food insecurity among San Francisco’s most vulnerable populations. To keep up to date on SF New Deal’s programs and impact, please visit http://www.sfnewdeal.org and sign up to receive email notifications. Join the #sfndewdeal conversation on Facebook and follow us on Twitter and Instagram @sfnewdeal.