FOR IMMEDIATE RELEASE

Thousands of California restaurants close permanently

State fails to respond to calls for aid

(Sacramento, CA) – One of the most dire economic predictions made at the beginning of the coronavirus pandemic – that 30% of California restaurants would close permanently – is gradually becoming the reality, with thousands of restaurants already closed and no serious effort by the state to aid businesses.

Today’s announcement from Gov. Gavin Newsom means that most California restaurants must continue to keep their dining rooms closed, while others have a glimpse of what the pathway looks like for them to begin operating with strict limits on their capacity. Because these continued mandates come without the benefit of a meaningful aid package to keep these businesses afloat, many more will simply close.

“Restaurants cannot sustain themselves or their employees when they operate with strict capacity limits, which means the state should long ago have crafted a comprehensive aid package to help these small businesses hibernate,” said California Restaurant Association President and CEO, Jot Condie. “This is what we had repeatedly urged the Newsom administration to do – make state help available to restaurants so that, once the pandemic is behind us, the families who own these businesses could go back, open the doors and turn the lights on again. Instead, they are closing for good, by the thousands.”

• Before the pandemic, 1.4 million Californians worked in restaurants. Since March, between 900,000 to 1 million of these workers have either been laid off or furloughed – and many continue to wait on an unemployment payment that never comes.
• 60% of California restaurants are owned by people of color, and 50% of California restaurants are owned or partly-owned by women.

California’s Restaurants Are Closing Permanently

In a recent survey conducted by the CRA:

• 60% of respondents (restaurants) who had received help from the federal government’s Paycheck Protection Program said they will run out of funds at the end of August.
• 63% of respondents have not received any rent relief and a staggering 76% say they need rent relief now
• 30% of restaurants say they will either close their restaurant permanently, or they will downsize by closing some locations. (This is in addition to thousands that have already closed.)
• Capacity Limits: Restaurants struggle to pay their bills and hang onto their employees when they are forced to operate under strict capacity limits, further highlighting the need for state aid to these businesses. In a recent CRA survey, less than half of restaurants (41%) said that a 50%  capacity limit would allow their establishments to remain viable.

“Our members are like most Californians, now wondering not just how to sustain a job or a business, but how to make the mortgage payment on their homes,” Condie said. “This could have been prevented with a few simple policy changes that would give restaurants rent relief and allow them to work with their insurers to cover some of their massive revenue losses. Yet, these ideas and others have been dismissed or ignored by a state legislature that is now about to adjourn. Their inaction has real consequences: Californians will soon look around our communities and see too many dark, empty store fronts, and it could have been prevented. This underscores the importance of the CRA’s call earlier this week for the Governor and the state legislature to hold a special session to specifically address the statewide restaurant crisis.”

Attached, please find a letter from the CRA to the Governor and legislative leadership.