RGV restaurants struggle to recover from major inventory losses after winter storm

Local News

Harlingen, Texas (KVEO) — The White House announced that for the next two weeks small businesses with less than 20 employees go straight to the front of the line for the Paycheck Protection Program (PPP) loan, but local restaurant owners say the PPP loan will not cover everything. 

Biden revises small business loans to reach smaller, minority firms

Snowbite owner Connie Nguyen said her Pharr restaurant took a huge hit after the business lost power last week.

Most restaurants lost their inventory and had to throw away food. Health rules does not allow restaurants to give away spoiled food.

“Everything was spoiled, we started to smell the food was bad,” said Nguyem. “We opened up the refrigerator and it was just not working, it was terrifying.”

Credit: KVEO; Pictured Connie Nguyen

According to Rio Grande Valley regional president of the Texas Restaurant Association Jerry Maddox, regaining inventory will not be easy as the distribution chain was stopped at a 100% during the winter storm.

“The distributor didn’t have electricity for five days, so they’re having to start from scratch too,” said Maddox. “All these things are kind of like the perfect storm.”   

Maddox is also the owner of Fazoli’s, a restaurant chain for baked pastas, subs, pizza and other Italian cuisine.

Nguyen explained she qualifies for the PPP loan, but it will not save her inventory.   

“The PPP is only meant to cover payroll,” said Nguyen. “It’s not meant to cover for inventory.”

Maddox said he spoke with Governor Greg Abbott on Monday about the restaurant industry across Texas and how they are suffering. He said it will take longer for restaurants to recover.  

Credit: KVEO

“Distribution has stopped 100% throughout Texas, it’s barely getting back right now,” said Maddox.  “Hospitals are going to have to get it first, then HEB’s and major food hubs are going to have to get this also, restaurants are going to fall in line.”  

Credit: KVEO

Local businesses like Nguyen’s will continue to take losses until the distribution chain is recovered.  

“Not only are we losing inventory, but we also aren’t able to recoup, and then we are paying extra for the inventory itself,” said Nguyen.   

Nguyen said her business will continue to open, with a limited menu as they recover.

On Friday, Governor Abbott issued a disaster declaration in all 254 counties in response to severe winter weather that is impacting Texas.
 

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