A year after the COVID-19 pandemic struck, some parts of the world are starting to pick themselves up and move to a semblance of the previous norm. Vaccines are continuously rolling out in many countries, with many like Israel and some states in the US removing the mandates on masks. Some industries that were plagued by the pandemic are slowly picking up.
However, despite the optimism, the foodservice industry still has a long way to go, with full recovery forecasted to take place by 2025. It’s not enough that customers are coming back to dining indoors or that people are still ordering deliveries or takeout. Systems and infrastructures must be created to continuously support this industry so that it’s better prepared for future crises such as the COVID-19 pandemic.
Initial measures to cushion the impact of the pandemic involved providing cash relief to individuals and loans to struggling businesses. In the Philippines, the Bayanihan to Heal as One Act and Bayanihan to Recover As One Act, both quickly signed into law, included programs aimed at providing financial assistance.
Funds allocated amounted to billions in loans, including the COVID-19 Assistance to Restart Enterprises (CARES) program, which is headed by Small Business Corp. Under CARES, micro, small and medium enterprises (MSMEs) can avail of zero-interest loans from the Department of Trade and Industry (DTI). Most of the Philippine labor force is employed by MSMEs, and so far, according to DTI, there have been at least 20,000 borrowers.
Under CARES, micro, small and medium enterprises can avail of zero-interest loans from the Department of Trade and Industry (DTI). Most of the Philippine labor force is employed by MSMEs, and so far, according to DTI, there have been at least 20,000 borrowers.
SMEs are also the focus in the EU, as the European Investment Bank Group allocated funds worth €200 billion for loans. The US has a number of comprehensive plans rolled out, the most recent of which is The American Rescue Plan Act of 2021. This law includes The Restaurant Revitalization Fund, which gives tax-free federal grants specifically to struggling foodservice institutions.
While this was definitely a step in the right direction, what many have realized is that these monetary solutions are not enough to fully support the industry. Many have reportedly not been able to receive these packages and some have not qualified for the different government programs available. In the Philippines alone, more businesses are still considered to be in the red by DTI, prompting calls for more financing options for MSMEs.
Tax and utilities reprieve
The reduced traffic caused by lockdowns, as has been the case in the Philippines, has resulted in lower generated income in the foodservice industry. Some are doing the best they can to survive by turning to deliveries and takeout, while others have no choice but to temporarily or permanently stop operations.
Running a restaurant includes so many overhead costs and for many with physical stores, rent is one that takes up the bulk. With barely any sales, the little pay any worker takes home won’t be enough to cover daily household expenses too. It’s been difficult to make ends meet.
The Bayanihan 2 has tackled this issue by providing a grace period of at least 30 days for utility bills that are due and a scheme that lets Filipinos settle their balances in staggered payments. Tax deadlines were also extended in 2020.
In Canada, businesses were provided with 75 percent subsidy for wages for up to three months just to retain workers on payroll. Resources were also provided so staff layouts could be avoided.
The US has a number of comprehensive plans rolled out, the most recent of which is The American Rescue Plan Act of 2021, which includes The Restaurant Revitalization Fund that gives tax-free federal grants to struggling foodservice institutions. While this was definitely a step in the right direction, what many have realized is that these monetary solutions are not enough to fully support the industry.
Restaurant shutdowns and MSMEs still struggling to survive has come with higher levels of unemployment. To address this, House Deputy Minority Leader Stella Quimbo and House Speaker Lord Allan Velasco have authored the Bayanihan to Arise as One Act (Bayanihan 3). Included in this economic relief package is about P45 billion allotted to wage subsidies and assistance to displaced workers, and a fund for businesses that have been severely impacted by the pandemic. As of press time, the act has moved forward and is up for plenary debates when Congress returns on May 17.
Temporary workforce reduction programs have also been underway in Europe, which takes it a step further than helping those who were left unemployed. Spain’s ERTE, Italy’s CIGS and Germany’s Kurzabeit are some furlough schemes that allow business owners to provide security to their employees without having to call for layoffs.
Bring up consumer confidence
Beyond help that’s targeted to the industry itself, the government must also take steps to quell any fears consumers still have about dining in. Although delivery and takeout have filled in some of the financial gaps, indoor dining is still the major way for the industry to remain sustainable. No matter how much you reorganize your spaces, if customers don’t feel safe to eat inside, then it won’t make much of a difference.
In Europe, temporary workforce reduction programs have also been underway. Spain’s ERTE, Italy’s CIGS and Germany’s Kurzabeit are some furlough schemes that allow business owners to provide security to their employees without having to call for layoffs.
This can be done first by pushing for vaccination among the population and ensuring that foodservice workers are prioritized since they have higher risks of contracting the virus. Safety measures have to not only be bolstered, but communicated clearly and in detail to restaurants. There should be unified guidelines in place and institutions must be informed of any changes as soon as possible, especially after the Centers for Disease Control and Prevention updates its guidelines to note that surface transmission is low and that airborne transmission is still the primary driver of infection.
What is common across the globe is that policies that address the COVID-19 pandemic stem from various industries and must go hand in hand in order to be successfully implemented. Holistic and systemic change is needed in order to survive and thrive in this new normal, with healthcare as the top priority.
Governments must implement strategies and safety nets that will let their people adapt, survive and become resilient when faced with global disasters, as this pandemic may not be the last.