Delta Variant And Inflation Are A Double Whammy For Restaurants Still Barely Hanging On

The battered restaurant industry could be at risk of suffering a knockout punch.

As economic conditions prevented restaurants from fully realizing the benefits of the summer spending boom, the rise in the delta variant of the coronavirus is looking like it might cut the season short, The Washington Post reports. Even well-capitalized restaurateurs with multiple locations are unsure of how to survive if this fall resembles that of last year.

The Centers for Disease Control and Prevention's new guidance recommending wearing a mask indoors for all individuals in areas of elevated coronavirus infection rates reflects a growing concern among governments and consumers alike that indoor dining is again unsafe, the Post reports. While retailers of all kinds are attempting to put customers at ease with vaccination and mask mandates, dining revenue has already dipped in states like Arizona, Texas and Florida, where case counts are highest, according to OpenTable data reported by the Post.

If indoor dining revenue dries up, restaurants could be in an even worse position to survive than last fall. One major factor in that concern is the rise in inflation that has caused a spike in food prices, the Post reports. Restaurants are faced with the choice of causing sticker shock in diners or selling items at a loss — and that is if they can even find enough ingredients to sell.

Another complication is the labor crunch industrywide, as thousands upon thousands of workers laid off during last year's nadir haven't — and won't — return to food service work.

When times were at their toughest last year, businesses lobbied for assistance in the form of federal stimulus funds. Restaurants received $28.6B as part of the American Rescue Plan passed in March, but that total had already been spent by the beginning of July. Only a third of applicants managed to receive funding from the program.