Wells Fargo senior economist Mark Vitner says he’s hopeful as the weather warms up, the coronavirus may lose some of its intensity, but before then, there will be a big drop in employment in America.
Forced closures of restaurants, hotels and colleges amid the coronavirus outbreak could result in a $24 billion loss in three months for food service companies that keep them supplied, an industry trade group said in a letter to President Trump on Monday.
Continue Reading Below
The unprecedented interruption to normal business has created “severe financial hardship” for food service companies and their 350,000 employees around the country, International Foodservice Distributors Association President and CEO Mark Allen said in the letter. The group asked Trump to include the food service industry in any bailout package to help embattled companies make rent payments, cover paid sick leave and other expenses.
POTENTIAL CORONAVIRUS TREATMENT GETS ORPHAN DRUG STATUS
“For both distributors and their restaurant customers, ensuring sufficient liquidity to continue operations has become paramount in the current operating environment,” Allen said. “We urge you to use your authority and work with Congress to develop policies to relieve this capital crisis for all businesses immediately.”
Officials in U.S. cities around the country, including New York and Los Angeles, have ordered the closure of non-essential businesses and asked residents to stay home due to the outbreak. The orders, designed to slow the spread of coronavirus, have resulted in widespread layoffs at restaurants, hotels and other businesses reliant on constant foot traffic.
CORONAVIRUS PROMPTS ‘PLAGUE INC’ VIDEO GAME MAKER TO DONATE 250K TO RELIEF EFFORTS
Some food service vendors have reported declines in business of 50 percent, according to the IFDA.
Allen noted that food service companies, which deliver the goods used in those businesses, must continue to operate their warehouses to service hospitals and other businesses that are still active despite the decline in cash flow. Foodservice companies operate at thin margins of 2 percent or less under normal conditions, the group said.
“Increasing the access to capital is the only way they can continue to meet these ongoing financial needs,” Allen said.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Negotiations on a federal bailout package stalled for a second time in the U.S. Senate on Monday afternoon. The $1 trillion package would provide direct payments to Americans and financial support to small businesses affected by the outbreak.
