Introduction (250 words)

The past two years have brought countless challenges to industries, companies, and

their way of doing business. The pandemic brought with itself “new” trends and lifestyle

activities for all consumers around the world. And this became a matter for companies;

covid-19 set up a number of tests for businesses' capability for adaptation and reinvention in

order to survive the continuous and unknown changes of our world.

After these two years of the pandemic, covid boosted a technology revolution in

businesses and, as a result, made companies have permanent changes towards internal and

external processes. The restaurant industry faced tough times of uncertainty when the

pandemics arrived, having a huge impact over aspects such as finance, economic stability of

business, sanitary regulations and/or closure and limitation of certain activities. Although

most big companies in the industry found their way through from having solid business plans

and contingency strategies, small and local businesses struggled to find a way out of it and

survive. It is worth mentioning the importance of the restaurant industry at a local level and

its economic repercussions, considering that they provide jobs, are economic investments and

offer an important service.

Considering that the pandemic is global, and internationalization has been an

essential growth strategy for restaurants in recent decades, it is imperative to investigate the

impact of COVID- 19 from the global perspective. This research paper seeks to explain and

analyze the effects on small restaurant business owners during the Covid-19 pandemic in the

USA, and the nuances found within this industry, looking at the challenges and threats

presented during this first period of the pandemic.

Methodology (500 words)

In order to better understand the industry and its sanitary and security measures, the

first approach to the food industry will be through a PESTLE analysis, a tool that helps to
understand better and at a wider scope, different important criteria to consider when

analyzing a market along with its challenges and needs.

When talking about USA political volatility, it is not considered as a high risk,

however, the pandemics brought uncertainty to many economic sectors from the policies and

regulations implemented by the government, in order to reduce the spread of the virus,

preserving and protecting the population. Although the policies and regulations change from

State to State in the U. S., multiple state governments announced closure of restaurants and

drinking places in 2020 (Campbell-Schmitt A., 2020). This created a huge impact over

restaurants’ stability, and mostly on small businesses, since many economical factors had to

be in line with the employment policies of the USA, for example, the salaries had to keep

being paid for this unofficial situation going on, renting of establishments affected owners as

well.

Which brings us to the economical factors and stability in the United States during

covid; for starters, the economic downturn due to pandemics disproportionately impacted the

food service industry, considered one of the largest workforce sectors in the United States.

When Covid spread in the United States, it shutdown its economy and resulted in a 22% to

60% decrease in the Gross Domestic Product (GDP) (Depaul & Mackenzie, 2021). In April

2020, the unemployment rate had increased, where 3.1 million jobs were lost and more than

110,000 restaurants had or been projected to close due to the economic fallout (Depaul &

Mackenzie, 2021).

Moreover, the alternatives demanded by society had changed, rapidly adopting the

“new reality” numerous trends were boosted, and therefore, restaurants had to adapt and

innovate their business models in order to satisfy and reach those needs. The online food

ordering trend grew enormously in the United States; according to a study by Statista (2021),

between March 2020 and March 2021, the growth of digital restaurant food orders for
delivery in the U.S. was 142% and for carry out 130%. Which proves the urgent change of

market needs during the pandemic.

Furthermore, as mentioned above, the technological revolution that covid boosted

into our daily life is enormous, leveraging the technological resources available and taking

into account the market needs, it innovates in many ways the restaurant industry, speeding

up transactions and improving order accuracy. Many businesses have taken advantage of this

situation, and went 100% digital or made the digital market the most of their sales and effort.

These days, the digitalization of businesses facilitates and reduces many processes and

human workforce, so trending of new emerging technologies in restaurants makes it faster

and even cheaper in the long-term to invest in.

In addition, the legal factors have been pushed by society lately, since the fast food

industry is a huge market in the U.S., they have become a huge target for people to look at,

and the U.S. population is becoming more aware of the employee exploitation and salary

neglection happening in these companies, which is why several employment laws have been

pushed to be fair and honest. Also, some legislation to help restaurant and drinking places

were implemented, with the purpose of helping business to survive, such as the “to go

Cocktail” legislation (Wright A., 2022).

After the pandemic covid-19 breakout, the shopping behavior towards environmental

aspects shaped; industry must shift towards more green products and processes in order to

stay in business and succeed in these new markets. It is worth mentioning that the US

population wastes 31-40% of post-harvest food (Xilu, 2021), which is directly a cultural

issue, and some of the huge companies leading in the industry could influence the consumers'

way of buying products.

Analysis ( 500 words)

 This being presented, in a general view, the pandemic brought more challenges and

limitations than opportunities to small businesses in the restaurant industry, and this mainly

focused on the financial struggle to grow and maintain themselves. However, as mentioned

above, the government tried to do their best to keep those companies running, since they

provide jobs and money kept flowing around. The Congress has created programs for

businesses to get by, and more than half of states enacted additional laws to help restaurants.

Also, Congress has provided funding for several initiatives to help small businesses,

including restaurants.This has included programs such as the Paycheck Protection Program,

the COVID-19 Economic Injury Disaster Loan program, and the Restaurant Revitalization

Fund, a grant program administered by the U.S. Small Business Association (Wright A.,

2021).

The pandemic has impacted core activities and basic functions of running a restaurant;

according to a report by the independent restaurant coalition (n.d.), 91% of businesses in the

industry reported struggle to hire during 2021, which had an impact on menu prices, 89% of

businesses report an increase in their prices. Even though the unemployment rate increased

and many jobs were lost, restaurants around the country provided better benefits for their

employees during the pandemic, 84% raised wages and 37% of all businesses reported adding

paid sick leave benefits for employees (IRC, n.d.).

Although funds and loans have been raised to support the industry, some of the

restaurant owners, still in debt, may not have the capacity to pay back loans they received

through the Paycheck Protection Program. While other applicants still await assistance, about

180,000 people still have not received money, according to a June 30 report by the U.S.

Small Business Administration (Wright A., 2022).

Financial challenges and stats

 Loans

other challenges

Conclusion (250)

https://get.apicbase.com/restaurant-future-after-covid/

https://blog.routific.com/10-stats-that-show-how-covid-19-impacted-food-delivery-
services

https://www.foodandwine.com/news/states-close-restaurants-bars-coronavirus

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8508391/

https://www.statista.com/topics/9996/coronavirus-covid-19-impact-on-restaurant-
food-delivery-in-the-us/#dossierKeyfigures

https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1480&context=jhfm

https://onedine.com/covid-19-regulations/