David Gibbs, CEO of Yum! Brands, joins “Squawk on the Street” by phone to discuss how the coronavirus outbreak is affecting American businesses what the government can do to help soften the blow to the U.S. economy.
The National Restaurant Association is asking the federal government for financial relief for the industry as it forecasts sales declines of $225 billion over the next three months due to the coronavirus outbreak.
The lobbying group is predicting the loss of between 5 million to 7 million jobs — more than a third of the total U.S. restaurant jobs — if the restaurant industry is shut down for three months.
At least two dozen states across the country have mandated that restaurants close their dining rooms, while some national restaurant companies are shifting to takeout, drive-thru or delivery service only across the country. Full-service restaurants saw their traffic decline by 3.7% in the week ended March 8, according to Black Box Intelligence.
In a letter addressed to President Donald Trump, House Speaker Nancy Pelosi and Senate Major Leader Mitch McConnell, the NRA asked for a $145 billion recovery fund from the Treasury Department for the restaurant and foodservice industry.
“Without aggressive and immediate action from the federal government, many restaurants that are a staple of local communities will simply never resume service,” wrote Sean Kennedy, the vice president of public affairs for the NRA.
The industry group also proposed $100 billion in business interruption insurance that would be backed by the federal government. While many restaurants have business interruption insurance, most insurers can deny claims because policies do not include a pandemic or virus, according to the NRA.
A federal loan program to equal lost revenue, $130 million in disaster unemployment assistance and $35 billion in community development block grants for disaster relief were among the NRA’s other suggestions.
The NRA also asked for a number of tax measures, including a temporary Social Security payroll tax cut of two percentage points.
Trump on Tuesday spoke with executives from the largest U.S. restaurant companies. One industry executive on the call with the president urged the White House to take action to support small business owners with a fund that would provide cash flow for business owners to remain solvent during the coronavirus pandemic, keep employees on payroll and continue to grow once things stabilize, according to a person with direct knowledge of the call.
In response the president indicated his support Tuesday, saying that “I think you’re really going to like what we’re doing,” the source said.
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