Restaurants are 'dropping like flies': TGI Fridays CEO
Pandemic shutdowns have ravaged the restaurant industry since mid-March, and TGI Fridays CEO told Yahoo Finance that another round of government incentives is "absolutely critical".
"People fall like flies here," said Ray Blanchette. "The dominoes fall every week and it seems like we're on our own here."
By autumn at the latest it was Ruby Tuesday. The 48-year-old fast-casual chain filed for bankruptcy this week. During the pandemic, the parent company of Chuck E. Cheese and California Pizza Kitchen will be added to Chapter 11.
A survey published by the National Restaurant Association last month found that 100,000 US restaurants, or nearly every sixth restaurant, are permanently or long-term closed and around 3 million people are unemployed.
"As the second largest employer in the country, if you look at 7.9% unemployment, you won't fix that without a robust restaurant industry," said Blancehette.
Ruby Tuesday is filing for bankruptcy protection, the latest chain of opportunity to suffer from coronavirus-related closures and changing consumer habits. The Maryville, Tennessee-based company has announced that its restaurants will remain open throughout the bankruptcy process on Wednesday, October 7, 2020. (AP Photo / Mary Altaffer, File)
Mixed stimulus message
The White House has sent mixed signals this week on the status of economic talks. President Trump signaled that he would support a bill that covers specific areas of the economy, including $ 25 billion for the aviation industry. Despite the president's renewed interest in a deal, Senate majority leader Mitch McConnell warns that any stimulus package will likely have to wait until after the November 3rd election. On Friday, the White House announced it was offering a $ 1.8 trillion incentive proposal.
"We're ten times the size of the airline industry and it's very annoying to be overlooked," said Blanchette.
At the height of the pandemic, TGI Friday laid off 80% of its 18,000 workers as its 870 restaurants worldwide were temporarily closed. Blanchette said the funds from the government's first CARES bill helped the restaurant chain bring back many of those workers and quadruple their payroll.
Like many restaurants, TGI Fridays was forced to offer outdoor seating to comply with CDC guidelines and to keep working during the pandemic. However, the colder temperatures in autumn are "terrifying" for Blanchette and his staff.
"Why the government can't get out of hand here and do something when it obviously helps is a mystery to me," he said.
TGI Fridays was ready to enter into a SPAC merger with Allegro Merger Corp. last spring. return to the public market. However, this deal has since been discontinued.
"Obviously our timing was as bad as you could hope," said Blanchette. “I mean, we literally wanted to go public in March. March 30th was the deadline for the SPAC. Of course that is not our priority today, our priority is our team. "
Alexis Christoforous is co-host of the Yahoo Finance show "The First Trade". Follow her on Twitter @AlexisTVNews.
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