Congress wants to give restaurants $60 billion more in aid. Operators deal with shortages of many food items. Quantifying the restaurant industry’s labor woes. A restaurant lifts a local man when he needs it most.

As many predicted, the $28.6 billion Restaurant Revitalization Fund was not enough to help struggling operators across the country. A new bill before the U.S. Congress asks for a whopping $60 billion in the form of the Restaurant Revitalization Fund Replenishment Act of 2021. In other words, this request is for more than double the amount in the original bailout.

When the Restaurant Revitalization Fund was first released many predicted it did not provide enough funding for an industry that has felt the pandemic’s pinch more than most. And, quite predictably, the money ran out very quickly after the Small Business Administration began accepting applications. More than 362,000 applications were received.

It appears widespread support exists for the new bill but the passage is far from a sure thing. Even in Washington, D.C., $60 billion is a lot of money. But the restaurant has industry shown it can get organized once and it's possible this can happen again, with both the National Restaurant Association and the Independent Restaurant Coalition backing the movement to increase funding.

Economic News This Week

• Initial jobless claims decreased by 9,000 to a total of 376,000 for the week ending June 5. The 4-week moving average totaled 402,500, a decline of 25,500. Both totals are the lowest they have been since March 14, 2020.
• The Consumer Price Index increased 5.0% for the 12-month period ending in May, per the U.S. Bureau of Labor Statistics. This marks the largest monthly increase in eight years. For food prices in May, please see the Foodservice News This Week section below.
• Consumer sentiment increased in early June, regaining roughly two-thirds of what it lost in May, per the University of Michigan. The Index of Consumer Sentiment rose to 86.4 in early June, up from 82.9 in late May. The Current Economic Conditions Index was virtually unchanged with June’s reading at 90.6 and May at 89.4. The Index of Consumer Expectations saw June rise to 83.8 from 78.8 in late May. The improvement in consumer sentiment was driven in large part by an anticipated all-time record decline in unemployment.

Foodservice News This Week

• Consumer prices for food increased 0.4% in May, per the S. Bureau of Labor Statistics. The price for food at home rose 0.4%. The price for away from home rose 0.6%. In the 12-month period ending in May, the price for food at home rose 0.7% while the price for food away from home increased 4.0 %.
• It didn’t take long for some chains to react to paying higher wages. Chipotle Mexican Grill increased menu prices by 4%, citing the fast-casual restaurant chain’s commitment to raising minimum employee wages to $15 an hour.
• Supply chain shortages don’t just hurt the little guys. The common perception is the big restaurant chains have huge procurement departments staffed with a highly trained people who know more about the products than the people who sell these items, which can insulate them from supply chain issues. Well, Starbucks seems to be short of cups, coffee syrups, cake pops, mocha flavoring and oat milk, per one published report. And Starbucks is not alone. Last month, Chick-fil-A revealed the chain is having problems sourcing its sauces. Part of the difficulty is some companies cutting back on the production of slower selling items to focus on higher volume menu items. Another difficulty is projecting the volume of new products is not an exact science and companies can find themselves running out if sales exceed their forecasts.
• Dave & Buster’s is back! proclaims the chain’s management in one published report. The eatertainment concept now features a menu that is 33% smaller than before. And to meet customer demand for speed of service, the kitchens now include new high-speed ovens and an upgraded kitchen management system that work together to reduce cooking times. These changes have combined to help the chain’s stores show positive EBITDA in the first quarter of 2021. The company as a whole returned to profitability in April.
• Restaurants in Seattle looked ready to reopen but the employees didn’t show up. This led to a lot of horror stories about postponed openings, owners bussing tables and how the loss of a single cook throws a restaurant into panic mode. The Seattle Times story puts some of the blame for the shortage of workers on the pandemic-related unemployment benefits, which add $300 a week on top of the regular state unemployment benefits. Perhaps the major cause of the labor shortage is people changing industries. Restaurants got hit hard in the pandemic so a lot more employees jumped to other industries. As the Times article put it, restaurants had a much deeper hole to dig out of this time.
• How bad is the restaurant industry’s labor shortage? Eating and drinking places are down 1.5 million jobs, or 12% from pre-pandemic levels per a jobs report from the Bureau of Labor Statistics. And the severity of the labor woes will vary considerably by segment, per a report from the National Restaurant Association.
• The restaurant industry does more than provide meals. At its best, the restaurant industry can lift people up when they need it most. Take, for example, the story of a panhandler in Fort Worth who used to hang around outside an Outback Steakhouse. Kenneth Smith was sleeping one day when a woman asked if he was all right. Smith admitted to being hungry and the woman went inside and bought him a $100 gift card. The restaurant’s managing partner, Laura Hodges, saw this transpire and asked the man to share his story. Afterward, Hodges told Smith to keep the gift card, telling him no one should be hungry. Hodges invited Smith to come to see her when he was in the area and in need of a hot meal. This led to an occasional odd job and then to a full-time position as a busser. When the Smith’s hotel raised its prices, Hodges put him in touch with Fort Worth Foodies, which raised $2,000 for rent. Smith is now recognized as he clears tables thanks to all the press he got.
• Comparable Store Sales Reports: Arcos Dorados Up 2.1%

For details and same-store sales of other chains, please click here for the latest Green Sheet.