CLEVELAND, Ohio – Gov. Mike DeWine’s coronavirus shutdown order pushed restaurants to choose very suddenly between two unappealing options.
Transition into a takeout business, or close for the foreseeable future.
It’s a monumental business and emotional challenge: Hundreds of restaurants throughout Northeast Ohio are battling decreased sales or total loss of income. Thousands of servers, cooks, bartenders and support staff are jobless. The future of the business is, at best, nebulous.
What restaurants face is akin to missiles fired at them from different directions: A sudden loss of income, supply-chain shifts, consumer fears about food safety, the cancellation of sports, concerts and other events that help draw out diners.
Only one thing seems certain: Whenever the smoke clears, the restaurant scene will look drastically different. Brandon Chrostowski, owner of Edwins in Shaker Square, says the establishments that survive — or even thrive — will be the ones that fight the hardest and come up creative solutions to the problem.
The night before the shutdown order, Edwins was seating people for a French dining experience in its Shaker Square dining room, serving things like artichokes braised in white wine. The next, Chrostowski was pivoting to transform his business to a takeout-focused format.
Chrostowski is doing good business with takeout, so far. But he isn’t taking anything for granted, and is constantly looking for ways to adapt.
“I think we’re the exception,” he said. “We had to hire more people. (Wednesday, March 25) we did $6,000 in business. Usually we’d do three or four. It’s incredible. We’re making money, enough to keep these jobs afloat. It’s about service for the community, it’s about being creative. … It’s working right now, and we’re going to continue doing it.”
Chrostowski attributes his business boost either to people seeking something “soulful” – a good grilled meal and maybe a glass of wine – or the fact that Edwins is in a walkable neighborhood.
But Edwins is just one of thousands of restaurants in Ohio facing a steep challenge, and some may never re-open. Times are particularly tough in areas like downtown Cleveland, which rely on traffic from office workers and events to fuel the restaurant business.
Chrostowski sees ways to weather the storm, to create opportunities, even for restaurants in dead zones with suburban pop-ups, kitchen takeovers and other innovative initiatives. The next three months will be critical, he says.
“This is a marathon,” he said. “You’ve got to cast your net and your marketing, and I have a three-month scale. That’s what I’m going with. After that something will change. What can you do within three months to keep people excited and happy, stimulated, fed? My lens right now is three months, and I’m not budging from that.”
The other challenge restaurants can face is a potential derailing in the supply chain, he said.
“Distributors have already switched their accounts to the grocers,” he said. “They are pounding that supermarket and grocery-market chain.”
New York strips, rib-eyes and similar center cuts are going to be gone until mid-May in restaurants, he said, while fresh vegetables and fresh fish will not be difficult to come by, as distributors want to push perishables.
That restaurant-to-store distribution change has begun, Chrostowski said.
“Why not? They have to survive, too,” he said. “They have guys and girls to employ. … People are going to find out where their niche is. Some people are going to close their doors.”
Adding to the equation is the unfortunate timing of restaurants having to deal with this in March – the industry’s toughest month even under less trying circumstances.
“This couldn’t happen at a worse time,” said Chrostowski, who predicts “25 to 30 percent” of restaurants will not return.
The business dip is the reason why Cleveland Restaurant Week is held in March, said Myra Orenstein, who coordinates Cleveland Independents, a consortium of almost 90 local restaurants.
In addition to timing two other factors are at play: Empty stadiums, arenas and concert venues – especially downtown – means restaurants have lost a pool of folks who stop in for a meal or drink.
And then there is the back-of-mind thought hovering for some about restaurant-food safety.
A national survey from Rakuten Ready, a company that works with online-ordering technology, said 43% of respondents are avoiding restaurant dining completely – no takeout, no delivery. (At least one local restaurant owner, Joe Kanaan, co-owner of Joe’s Deli & Restaurant in Rocky River, was hospitalized after testing positive. The restaurant is now closed.)
Mike Miller of Music Box Supper Club has his eye on the future, and that is keeping him busy with “office work.” While he is “scrambling trying to find new dates” for postponed concerts, his restaurant in Cleveland’s Flats is shut down entirely.
“Especially given our location, we’re not convenient,” he said.
“My gut tells me they (downtown restaurants) are probably feeling it a little bit more,” he said. “I think fewer are choosing to stay open. … Even though there’s a high density of restaurants in that area, there’s not a high density of population.”
Miller also is dealing with postponed corporate events, but it’s wedding ceremonies and receptions that get to him on a personal level. “Those are the folks I am really feeling for. Those decisions are life-changing decisions.”
He added: “I think a lot of people are really going to try hard to come back. The tough part is going to be how long does this last and do they have the cash reserves to buy a whole new supply? You’re going to have to start from scratch on almost all your inventory.”
A subsequent seasonal surge in the virus down the line also can hammer the industry, he said.
“It’s going to be painful. It’s going to be a real challenge for a lot of people even with the stimulus bill announced. It really isn’t going to help a lot of work-a-day restaurant owners. That stimulus package probably is good for laid-off employees, but for them not so much.”
Joe McDonald of Gunselman’s Tavern in Fairview Park, whose future depends in part on that package, already has seen some relief.
“It depends on what the relief effort is from the government on down,” he said. “KeyBank is giving us a minimum of 90 days interest-only payments. That’s a huge burden off us. If we’re going like this with a skeleton-crew staff and with the support of the community we can go (continue business). Orders are lighter, but we’re still doing a lot of business.”
The other thing helping the tavern is its loyal base of customers who waited for 90 minutes in 40-degree weather for a fish fry the Friday before the shutdown announcement. Many keep coming back to the comfortable joint on Lorain Road, and tipping generously, McDonald said.
“It’s remarkably well under the circumstances,” he said. “We’ve been overwhelmed at some points only because we’ve gotten rid of most of the staff. It’s been really strange.
It’s been kind of crazy.” The craziness is because his tavern, known for its famous burgers, had geared up like a lot of places for St. Patrick’s Day. They laid in Guinness, Jameson and corned beef. That day, they sold 600 sandwiches – with no dine-in seating and mostly through takeout.
“It was unbelievable,” he said.
Save for a burger distributor he deals with, McDonald hasn’t felt many ripples from the supply-chain shift Chrostowski mentioned. He agreed downtown Cleveland restaurants “absolutely” are taking a hit. McDonald has embraced Fairview Park, and the city has returned the love.
“This is one of those corner bars,” he said. “We hold every fundraiser here. … We need to pay our bills, but the thing is we are that corner public house where people want to at least feel that sense of normalcy.”
McDonald said he has been “pleasantly surprised” at the numbers: With a diminished staff, the restaurant has been doing about 60 percent of what they used to, he said. And he has another need to keep his restaurant in the black.
“I don’t want go back to a straight job,” he said.
One fine-dining restaurant staffer who did not want to be named said their business – not in downtown Cleveland – was doing about $3,000 a day compared to $12,000 to $15,000 before the shutdown.
“It’s definitely a hit,” they said, adding they also think that downtown Cleveland would see a greater impact than suburban restaurants.
While suburban restaurants can catch the flow of traffic near homes, downtown Cleveland, for some, is a destination. But no events means no dinner out.
“You’re not going to drive 20 minutes downtown and 20 minutes to get back,” the staffer said.
One person who is seeing firsthand what downtown Cleveland restaurants are dealing with is Doug Petkovic. He’s involved with a trio of restaurants sandwiched on E. 4th Street – Flannery’s, Lola Bistro and Mabel’s BBQ.
“There’s no business. We’re not taking extra hits; there’s no hits – whether you’re in the suburbs (or city).”
March would have been big for Flannery’s in particular, with both St. Patrick’s Day and the NCAAs, he said. The restaurant-bar is a huge gathering place not only for locals but for out-of-town alumni groups who like to hoist a few before or after games.
But when it comes to a long-term forecast, Petkovic stops short.
“I would be lying if I gave you a percentage like I think I know what’s going to go on,” he said. “I know about the restaurant business; I don’t know how a pandemic affects a small business. We hear different time frames. … To be honest I don’t know if anyone understands.”
How long concerns linger over the virus “will dictate who is going to reopen and how they are going to reopen and how many restaurants. Whether they can hang on long enough … remains to be seen.” How relief packages work also will affect things, he said.
“We’re doing everything we can to be fiscally responsible to make sure we come back strong,” he said.
“I laid off over 700 people. You want to talk about having a bad day? That’s a bad day.
I feel for my employees.”
The restaurant scene will change. It’s definitely more ‘when’ than ‘if’. When Ben Bebenroth closed Spice this month he referred to preparing for a “new ‘normal’ on the horizon.”
Miller also is gazing at that horizon.
“I really think we’re not going to have answers here till six months after the shutdown is lifted,” he said. “Then you’re really going to see how the landscape of the restaurant industry, what the impact is going to be. It’s not going to be Day One that we can open, and it’s not going to be Day 14 or Day 21. It’s going to be about six months before we get a real sense. It will depend how customers come back and how financially strong the ones that do get back open are, and how long they can tolerate whatever traffic they are getting.
“It’s an unknown.”
Source: Thanks https://www.cleveland.com/entertainment/2020/03/greater-cleveland-restaurants-weigh-effects-of-shutdown-analysis.html