Will restaurants survive COVID-19? How Memphis restaurants are fighting to make that happen

Almost two years have passed since it's been business as usual for Memphis restaurants — since March 2020, when the COVID-19 pandemic first hit Shelby County.

What's followed has been a perfect storm of shutdowns, worker shortages, supply chain issues and variant-induced changes in dining habits.

Now, Memphis restaurant owners are asking for the public's help as they continue to navigate the ongoing pandemic.

The Memphis Restaurant Association put out a call Tuesday for Memphians to reach out to members of Congress to replenish the Restaurant Revitalization Fund (known as the RRF). The call to action aligns with a nationwide movement to help replenish this federal fund to help restaurants recover from pandemic-related losses.

“I’m not one for sports metaphors, but they certainly fit today. When it comes to replenishing the Restaurant Revitalization Fund  — we’re at the bottom of the ninth, the final minutes of the third period, or the two-minute warning in the fourth quarter,” said National Restaurant Association Executive Vice President of Public Affairs Sean Kennedy in an email to the NRA membership Monday.

Across the country — including in Memphis, many restaurants are at a make-or-break moment after this federal fund set up to help them out didn’t have enough money to go around.

According to the NRA, approximately two-thirds of the applicants for RRF did not receive money before the fund ran out.

“There are a lot of folks who were not helped with funds from programs like RRF, PPP (Paycheck Protection Program) and EIDL (Economic Injury Disaster Loan). Replenishing the RRF makes a level playing field to recover from what has happened to our industry,” said Memphis Restaurant Association President Mike Miller, who owns Patrick's Neighborhood Bar & Patio. “Everyone deserves the opportunity to recoup their losses over the past two years and save their businesses. This is their life's work.”

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What Memphians can do to help

The Memphis Restaurant Association and restaurateurs across Memphis are asking for people to reach out to members of Congress to support the replenishment of the RRF.

“It will go a long way to helping your favorite restaurants survive,” said The Majestic Grille co-owner Deni Reilly.  Her restaurant was one of the many across Memphis that was approved for RRF, but never received funds due to the shortfall.

The window for approving the Restaurant Revitalization Fund Replenishment Act is looming. The NRA pointed out two critical dates: Government spending expires on Feb. 18 and President Biden delivers his State of the Union Address to Congress on March 1.

The NRA predicts at some point in between those two dates, Congress is going to pass a large spending bill, likely its only one for the year.

“If the RRF is going to be replenished, it will happen at that point. So we need to be as engaged as ever,” Kennedy said.

The NRA is asking people to request their senators formally cosponsor S. 2675, the “Continuing Emergency Support for Restaurants Act” — legislation that would fully fund the RRF for all pending applications.

The Restaurant Revitalization Fund shortfall

According to the Independent Restaurant Coalition, 177,000 restaurants and bars that applied for this relief last year received no funding.

That translates to close to two-thirds of the applicants that applied for RRF funds in April 2021. It is estimated that the initial $28 billion fund had a shortfall of $60 billion. 

Those numbers only include restaurants that received confirmation of approval for RRF funds.

“We were in the system applying for our restaurants on the day the portal opened, and then the system shut down due to the funds being gone,” said Tandem Restaurant Partners co-owner Tony Westmoreland, who owns restaurants and bars such as Zinnie’s, Robilio’s Side Car and Ben-Yay’s. "We don't know if we were approved or not."

Just shy of 200 Memphis restaurants received funds. According to a list on sba.gov, payment amounts ranged from $3,634 to $2,231,881. The Commercial Appeal was not able to determine how many Memphis-area restaurants had qualified for funds but not received them.

Why restaurants need the RRF

RRF was meant to be the relief that helped restaurants recover from the COVID-19 pandemic closures and loss of business

The National Restaurant Association estimates more than 900,000 restaurant jobs have been saved by the initial round of RRF grants. The NRA also reports that nearly 50% of restaurant operators who  did not receive RRF grants feel it’s unlikely that they will stay in business beyond the pandemic without a grant.

“We can’t keep taking these hits. Things got better over the summer, then delta hit. In the fall it started to improve, and then came omicron,” said Aldo Dean, who owns restaurants such as Aldo’s Pizza Pies, Slider Inn and Bardog Tavern. “Many restaurants may close over the next 12 to 18 months if things don’t improve.”

Dean received funds for three of his five restaurants that were approved for RRF. “Most importantly, the RRF helped us keep our salary workers — the core of our business — employed.”

Huey’s only applied for its two restaurants hardest hit by the pandemic.

“We are so grateful to have received support from the Restaurant Revitalization Fund for our Downtown and Millington locations as they were hit particularly hard during the pandemic. Having this assistance allowed us to get through some of the worst times during the pandemic without having to lay off any employees due to COVID hardships and maintain competitive benefits during the nationwide staffing shortage," said Samantha Boggs Dean, marketing and special projects director for Huey’s Restaurants. "This funding was also crucial for us, and other local independently owned restaurants, as we faced supply chain issues, inflation affecting product prices and having to absorb losses during low-traffic periods."

“Sadly, we have already seen so many of our fellow restauranteurs shut their doors. It is our hope replenishing the Restaurant Revitalization Fund would allow our fellow locally owned businesses to remain strong and continue serving our community.”

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Downtown Memphis restaurants have been hit especially hard by the pandemic.

“January has been very bleak for Downtown restaurants in particular. We rely on business and convention travel and tourism that hasn’t come back,” Reilly said. "Most Downtown restaurants are really suffering." 

Initially, the SBA was to dole out the money by prioritizing historically underserved groups such as women, people of color and veterans.

Mayra Alejandra Sevilla, who owns Portales Mexican Restaurant in Cordova, was initially was told she would receive funds. A few weeks went by, and then she received a letter stating that she would not receive funds because of a lawsuit by an East Tennessee restaurant owner who argued his application was de-prioritized because he was white. She was one of the many business owners across the country whose application was put to the back of the line due to the lawsuit.

"It would have meant a lot to us. Since the pandemic, we have struggled," said Sevilla, who is of the understanding that she will receive funds if the RRF is re-funded. "We could still use those funds now more than ever. The price of everything is going up. For example, we now pay $40 for a gallon of oil that used to be $21."

Westmoreland added that his, along with numerous restaurants in Memphis, desperately need these federal funds.

“Most restaurants have not recovered from the loss of revenue in 2020 and 2021. And now we have increased labor and product costs,” he said. “This money is not needed for future projects, but to get us through. A lot of it will be used to pay off loans so that we are not lingering in debt.”

Jennifer Chandler is the Food & Dining Reporter at The Commercial Appeal. She can be reached at jennifer.chandler@commercialappeal.com and you can follow her on Twitter and Instagram at @cookwjennifer. 

Want to help?

The Independent Restaurant Coalition has set up an easy-to-use call-back program that helps people call  their congressmen directly. The coalition also provides a script so callers know what to say. . For more information, visit saverestaurants.org/callcongress.

COVID's impact on restaurants: By the numbers

88% of restaurants experienced a decline in customer demand for indoor on-premises dining because of the omicron variant.

76% of operators report that business conditions are worse now than three months ago.

74% say their restaurant is less profitable now than it was before the pandemic.

96% said the Restaurant Revitalization Fund grant made it more likely that they would be able to stay in business.

92% said the grant helped them pay expenses or debt that had accumulated since the beginning of the pandemic.

*Source: National Restaurant Association