Food stamps for restaurants

Food stamps for restaurants

Many industry segments have been severely negatively impacted since COVID-19 first began to shut down the American economy in mid-March. The travel, hospitality and entertainment segments in particular have been decimated, and the outlook still appears to be fairly bleak. 

Restaurants in particular have a massive economic impact on the American economy. According to the National Restaurant Association, restaurants employ approximately 10% of the American workforce, have an approximate $2.5 trillion impact on the U.S. economy, and represent a large portion of small businesses — which is important for localized economic growth. 

Since the beginning of the pandemic, some restaurants have moved to offer pickup or delivery, while others chose to close their doors. In many parts of the country restaurants are currently allowing limited indoor and outdoor dining, encumbered by patron limits, distancing regulations and increased expenses for COVID-19 mitigation efforts. 

To stay afloat, many restaurants have reduced offerings, cut hours and increased pricing. For most restaurants, none of this is sustainable for the long term. What are we going to do as a country to help restaurants out?

There are two problems. First, there’s the short-term problem of restaurants not having enough positive cash flow to continue operations. Most restaurants do not have large stockpiles of cash or access to loans that allow them to absorb losses over a long period of time. 

The Payroll Protection Program helped a lot of restaurants, but the longer this pandemic lasts without additional programs, the more restaurants will go out of business.

Second, there is the longer-term problem of consumer confidence. 

Currently, a large percentage of the population is terrified of being around groups of people. This will likely continue until people do not associate as much risk with social interaction.

There is no doubt that the government will continue to pass money out to people and businesses for the next several months. Instead of broadly handing money out to every family who makes under $50,000 to spend (or save) on whatever they see fit, perhaps it would be better to target the spending on areas of the economy that need the most help. For instance, if every U.S. adult received $250 in vouchers that had to be spent at a restaurant, it would accomplish several things. 

First, it would generate more than $50 billion in restaurant revenue. That would help out a lot with restaurants’ short-term cash problems. Second, it would increase consumer confidence. People would be able to go out and see that restaurants are doing a great job of mitigating risk, and death is not imminent. Third, it would feed people who might be in need of food.

Obviously this is not the exact form a program such as this would take, but I believe that we should consider something like this for restaurants. Restaurants have the power to help pull this country out of the economic doom that we have fallen into, we just have to make sure that enough of them are around to do so.

Alex DiNovo is president and COO of DNO Produce group of companies, Columbus, Ohio. E-mail him at

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