(CBSNewYork/CBS Local) — Dining out has been one of the many social and economic casualties of the coronavirus contagion known as COVID-19. City and state governments all over the country have closed restaurant dining rooms, which were never really set up with social distancing in mind anyway. Only delivery and takeout orders are allowed for the foreseeable future.
Many restaurants have shifted to the new, hopefully short-lived reality. Many more have closed entirely. Whether they’re gone for now or gone for good remains to be seen. But for the time being most restaurant staffers find themselves unemployed, and people who might dine out under normal circumstances find themselves ordering in, if they can even find a place to take their order.
The restaurant industry is suffering, like most of the economy. But there will come a day when people will eat out again. And while the landscape will be drastically different, the experience may be strikingly familiar. Once the health crisis subsides, what will it take for restaurants to open their doors?
Jason Bowell is the assistant general manager at the Beatrice Inn, a traditional New York chophouse that prides itself on its innovative yet timeless meat dishes. Bowell has been managing restaurants for about a decade and worked in the restaurant business for the better part of three decades.
“The restaurants that are going to have not as much trouble getting back on their feet are going to be restaurants that are involved with larger chains,” says Bowell. “Restaurants that are able to pivot well enough to create a good enough online delivery business — delivery and takeout business — are at least going to weather the storm a little bit. And people that are savvy enough to understand how to work their way through getting relief from the government. There are loans being offered, especially for restaurants that are keeping people on staff as paid.”
A successful pivot, even if only to tread water in the short-term, is far from assured for most establishments. There are many factors at play.
“Places with high overhead, like large places that would normally really focus in on getting a lot of guests in and turning those guests over, they’ll be struggling pretty bad,” Bowell points out. “If your business model is based on having large groups of people in your place… your costs per square foot is going to be really hard to cover by doing delivery.”
Those costs could be anything from fixed costs like rent on the space to variable costs like electricity and other utilities. Variable costs, of course, drop with decreased usage. Restaurants sharply reduced their labor costs when governments closed dining rooms and eliminated it entirely if they opted for hibernation. After all, as Bowell points out, “the most important difference between a restaurant that’s going to succeed and one that’s not going to succeed is whether or not you can cover your current costs.”
While reducing or eliminating labor costs may bide time in the short-term, those tactics will also make re-opening that much harder when that time finally comes. “I don’t see the point of not employing people, being in business if you can. If you’re not, not only are you going to have a really hard time not completely folding while the restaurants are closed, but also getting yourself back up to speed when you’re actually allowed to start taking people again.”
Having a staff ready to go when the economy opens its doors again could be the difference between a strong comeback and a dismal end. “It’s about staff retention,” Bowell bluntly puts it. “If I retain my staff, I could probably be open in four or five days. And that’s just to make sure that we’re getting all of our product in and that we’re prepping everything and all the things we need to have ready to go for service are ready to go.”
Not retaining staff means using time for hiring and training that might otherwise be spent serving, and making money from, the public. Another potential hurdle is restocking restaurant kitchens with ingredients.
“You’re going to have a lot of people ordering a lot of stuff really quickly,” says Bowell. “And that’s going to cause issues getting product from point A to point B if you’re having huge, massive orders come across your board. Keep in mind, you make those orders for all that food, it’s all perishable. So it’s all about timing. Restaurants are going to have to wait until they’re stocked up, until they’re prepped and then take a day to open. It might be staggered when those restaurants are opening.”
The few restaurants that can stay open, retain staff and ramp up quickly, can expect banner days as all the pent-up demand fills the marketplace. Diners should expect a far different landscape, however, with fewer dining-out options. According to Bowell, “a lot of those places that shouldn’t have been open, that were on the cusp, are going to be closed. So all the restaurants that are still open are going to benefit from that for awhile.”
The in-house dining experience may largely return to what it was before the pandemic, and restaurant scenes everywhere will find some sort of post-coronavirus existence. But Bowell doesn’t see the world returning to the way it was. “I don’t think there’s ever a normal again after this, because this is really rewriting the way all restaurateurs think about their businesses. It’s going to be a different playing field. I think a lot of people learned a lot of lessons about how their businesses run during this thing. It’s going to change the way they run their businesses right now.”