Across
America, restaurant dining rooms are empty. Some have locked the door,
others have skeleton crews working to fulfill delivery and carry-out
orders as customers hunker down in their homes, waiting to see what
happens next.
The coronavirus pandemic — fast-moving, and endangering
people who spend time in public spaces — is uniquely poised to take down
the restaurant industry as we know it. As if tailor-made to render
restaurants unusable, the pandemic is a time bomb. And restaurants will
not be able to delivery or takeout their way out of it.
Many of the restaurants that close during the pandemic
will not reopen their doors. Diners should also brace for a restaurant
landscape that will be entirely different by the time — however near or
far off it may be — they can be safely encouraged to enjoy a crowded
night out again.
“We are about to see a lot of places go broke forever.”
On Saturday evening, Georgia-based restaurateur and Top Chef judge Hugh Acheson tweeted the existential dread
that so many in the restaurant industry are feeling in the wake of
restaurants closing to halt the spread of COVID-19; first as a choice to
protect staff and community, and now, increasingly by order of local
governments. The next night, after some states started seeing mandatory closures, Acheson tweeted, “We are so fucked.”
Just hours ago, the White House issued a recommendation that Americans avoid dining in restaurants. Over the last few days,
governors and mayors across the country have announced escalating
measures to keep people away from crowds. The on-the-ground conditions
for diners and operators have changed so much in the past few days,
evolving from “go out if you feel healthy” to mayors calling for
restaurants to halve their capacity to governors issuing full restaurant
shut downs. For large cities without any mandated capacity closures,
it’s likely a matter of when, not if.
Even before the mandatory closures, some of the highest-profile restaurateurs in the country were closing their doors. Tom Douglas shuttered 12 of his 13 Seattle restaurants. Danny Meyer closed all Union Square Hospitality restaurants in New York and D.C. David Chang
closed all Momofuku restaurants in D.C., Los Angeles, and New York. A
statement from the restaurant group called the current moment
“unquestionably the most difficult moment in Momofuku’s history. The
severity of the COVID-19 crisis has put our business and community in
completely uncharted territory.”
A crisis of this scale and scope, so uniquely damaging to
restaurants, is indeed unprecedented. And for now, restaurants are
doing their best to stay afloat, ramping up delivery, offering curbside
to-go service, promoting merch, offering gift certificates, begging
diners to reschedule rather than cancel pre-paid reservations. But the
truth is, compared to full dining rooms night after night, these are
band-aids, temporary stop gaps to stop hemorrhaging money. Gift cards,
which are effectively microloans to the restaurant owner, also do little
to help workers in the short-term — or restaurants that don’t have the
infrastructure to sell them.
Independent operators need a major infusion of cash —
cash that’s more readily available from the government than from their
stressed-out customers — to make it. They need rent alleviation,
eviction protection, and tax deferrals, at a minimum, to live through
this body blow. Who knows what they’ll end up getting.
As ordered, restaurants around the country that are
staying open are attempting to do so by transitioning to takeout and
delivery. Already, some restaurants are reporting
that delivery hasn’t kept pace with the loss of in-person customers.
And while Grubhub has suspended some of its fees, the fact remains that
as of right now, delivery services take a hefty cut of the restaurant’s
share with each order placed. There’s work involved in making the shift
to delivery and takeaway — time and money that a restaurant likely does
not have to spend. In the best-case scenario, the model effectively
turns restaurants into so-called “ghost kitchens,” eliminating the need
for nearly all front of house staff. David Chang has called the pivot to delivery “fools gold.”
But that’s a problem for a potential next chapter in this
pandemic. Across the industry, workers are losing tips, shifts, and
jobs right now. They need to eat and pay rent. For line cooks,
for servers, for bartenders — really for most people who had restaurant
jobs even last week — prolonged closures means the loss of wages. Even
for workers from those restaurant groups that are continuing to pay
wages and offer health care coverage for the rest of the month, those
jobs and the wages and benefits that come with them are effectively
over.
The restaurant industry is contracting on both ends.
Workers in need of jobs will (hopefully) find their ways to gigs in
other industries. Companies that make their money servicing restaurants —
equipment repair, cleaning crews — face similar prospects. “I just got
laid off because of COVID-19’s effect on the restaurants to function
safely. The irony is that we won’t be able to find other restaurant jobs
bc more are closing everyday due to the virus,” one restaurant industry worker tweeted over the weekend. “Where’s our relief?”
This need for relief is compounded by the fact that many of the more than 15 million workers of the restaurant industry, like small-business restaurant owners, also live precariously; only an estimated 25 percent of restaurant workers work in localities with mandated paid sick leave. Crowdfunding for catastrophic illnesses and injuries
is all too common for restaurant workers because paid sick leave and
health insurance aren’t guaranteed industry-wide and many live at or
below the poverty line.
Restaurant workers in America have been living as precariously as the businesses that employed them.
Run on shockingly thin margins,
few restaurants can survive a bad week, let alone a bad season or a bad
year. “It has been some tough times overall for many restaurant owners
in the last few years,” Acheson tweeted
over the weekend. “Costs up, rents up, employees scarce, wine tariffs…
sucked our bottom lines... I was worried a year ago, but nothing like
this.”
Both the large groups that have enough cash at hand to successfully “mothball”
and the restaurants that can run a successful delivery operation are on
borrowed time. This outbreak has no clear end date. There will be
businesses who simply cannot afford to stay furloughed or continue doing
delivery.
And when those restaurants that survive do reopen,
they’ll do so with their pocketbooks depleted, without an emergency fund
to spare should some other unexpected issue hit (and in the restaurant
business, there’s always an unexpected expense around the corner). They
will also reopen their doors to a new world of challenges, not least of
which is facing a dining public likely either coming out of or in the
midst of a global recession. Those diners who lost income after supply
chain and nationwide business closures due to social distancing will
simply have less money to spend on dining.
Opening new restaurants will likely also pose unique challenges after the pandemic passes. The groups most targeted by xenophobic, racist backlash
during the crisis might face discrimination when it comes to getting
loans; restaurateurs from marginalized communities might not be able to
bounce back into restaurant ownership at all. Even the big players may
find themselves struggling to secure funding if a global recession makes
investors skittish. Simply put: Don’t expect all, or even many, of the
restaurants that close because of this to just bounce right back.
This is not to say that diners shouldn’t do their part
immediately to help support these businesses. Order delivery while it’s
still widely considered safe to do so; order more than needed to up the
check average; tip generously; buy gift cards for future use; buy
restaurant merch online; reschedule pre-paid reservations rather than
requesting refunds. If you have the money, consider stepping up like NBA players
and personally transferring wealth directly to restaurant workers. Call
your local representatives and demand that they provide relief to this
industry.
Restaurants are an invaluable part of the social fabric
of our towns and cities. We rely on them to nourish us, to host us as we
celebrate, to provide us community, to provide us entertainment. It’s
unthinkable that they will not be there to meet us when we come out of
this.
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