Howard Schultz said Monday that he worries that many small restaurants and retailers may struggle to survive the coronavirus economic halt without additional help from the U.S. government.
“If we don’t provide a backstop for the restaurants, I suspect that we could see a situation around the country in which approximately 30% or more of small, independent retailers and/or restaurants never reopen,” the billionaire former Starbucks CEO said on CNBC’s “Squawk on the Street.”
Schultz said he hoped Congress and other public officials “are looking at ways to recognize that we must not only flatten the curve of the health crisis but we must begin to flatten the curve of economic despair.”
The value of these businesses extends far beyond their top-line revenues, he stressed. “It’s employment. It’s vendors. It’s all the people who support them, not to mention the intrinsic value of neighborhoods and community gathering.”
Congress created a $350 billion loan program for small businesses as part of a $2 trillion economic relief package meant to soften the blow from the COVID-19 pandemic.
The loan program, which went online Friday, has already seen a flurry of demand, adding to existing concerns that $350 billion wouldn’t be enough to assist all the businesses that need help. Portions of the loans used for payroll and certain other expenses can be forgiven.
Schultz suggested that future fiscal stimulus measures should include more of a “backstop” to help landlords and banks who want to “forego not only the rent in the short term but give an opportunity for these restaurant operators to open in a way in which rent is forgiven.”
“We can’t have a scorched earth situation in which 30 to 40% of restaurants and small businesses do not reopen,” said Schultz, a longtime Democrat who had considered an independent run for the presidency but decided against it.
“It’s not a time for politics. It’s a time to band together to get hope to people who need it most; and most importantly to demonstrate shared humanity,” he said. “We must come together and recognize that we’ll get through this, but we also have to dig deep to help those people who can’t help themselves.”
Schultz’s foundation launches ‘ThePlateFund’
The Pike Place Market stands virtually empty of patrons on March 10, 2020 in downtown Seattle, Washington. The historic farmer’s market is Seattle’s most popular tourist attraction, and business has been especially hard hit by coronavirus fears.
John Moore | Getty Images
Schultz’s foundation on Monday launched “ThePlateFund” to help assist restaurant workers in the Seattle area who are facing economic hardship from the COVID-19 pandemic.
The Schultz Family Foundation partnered with other local organizations — All In Seattle, the Seattle Foundation and UpTogether — in establishing the $4 million fund. The program offers them a one-time payment of $500 and can be delivered within 48 hours, Schultz said.
“Friday was the third week in which restaurant workers have not gotten a paycheck,” Schultz said, noting the COVID-19 pandemic began hitting the Seattle area sooner than other parts of the country.
Schultz said the program is meant to deliver immediate help to impacted workers who are waiting on various government assistance programs.
“We have to recognize that stimulus is going to come but it’s going to be late,” he said. “They need money and they need it now. They can’t put food on their table and this is a problem.”