For many restaurateurs, it may not be desirable, or viable, to open at all under guidelines put out by the federal government.
The White House released an “Opening Up America Again” plan with specific guidance for safe behavior for individuals and employers in three phases, starting with more-rigorous physical distancing and cleaning protocols and relaxing them as the pandemic subsides. The Food and Drug Administration has posted best practices for food stores and restaurants, the Centers for Disease Control and Prevention has published reopening guidance, and the National Restaurant Association has issued a blueprint for recovery.
Restaurateurs are rushing to install sneeze guards, generate disposable menus and stock single-serve condiments. They are trying to order “hand-free” bathroom accoutrements online (mostly sold out) and thinking about how to orchestrate social distancing for employees in tight commercial kitchens.
But the biggest question of all remains: Will customers come? And if they do come, will restaurants have any possibility of survival at the 50 percent or even 25 percent occupancy some governors are mandating?
Even for high-profile restaurants with celebrity chefs and owners, the answers are grim.
Does it make sense to open at all?
Michael Shemtov has eight restaurants in Charleston, S.C., and two in Nashville. Rather than going to 50 percent occupancy or takeout-only in March, he chose to close it all down, laying off 350 of his 400 employees. His flagship restaurant, Butcher & Bee in Nashville, had $2.5 million in sales last year.
“We make 80 percent of our money from March to September,” he said. “If we open back up, I’ll be going into September not with $40,000 or $50,000 in the bank — I’ll be limping into the slow season. I would need $100,000 to open that back up, and I wouldn’t expect to make a profit until the second quarter of 2021.”
He received a loan from the federal Paycheck Protection Program (PPP), but he doesn’t want to sign the paperwork, because that will start the clock for when he has to start paying the money back. He will need to sign it to get the loan before he opens to staff and stock up, but if it is too far in advance of opening, the clock to repayment is ticking with no money coming in the door.
“It was originally a 10-year loan if you didn’t get forgiveness,” he said. “But after it was passed, it was two years to repayment.”
He is worried that he won’t get forgiveness, because that is predicated on rehiring the same number of full-time employees. If his restaurants open at half-capacity, with tables six feet apart and patronage slow, he won’t need all those employees or be able to support them with sales. And besides, he said, with the extra $600 in unemployment benefits right now, some of his former employees are making more money unemployed than they would busing tables or prepping.
“I’m going to have to say: ‘I need you, come back, but I don’t need you. I’ll pay you to stay home and do Zoom videos,’” Shemtov said. “It’s the weirdest position to be put in.”
The bottom line, he said, is that “this is a once-in-a-century public health crisis that uniquely affects restaurants. The circumstances have prevented us from using the first $2 trillion of aid that Congress has put together, and we account for a third of the unemployment claims.”
What if restaurants open too soon?
Nina Compton is a James Beard Award-winning Saint Lucian chef with two restaurants in New Orleans, both closed. She let go all 120 of her employees and has used one of her kitchens to prepare meals for hospital workers for the past five weeks with community donations.
At the end of four weeks with the restaurants closed, Compton and her husband said they felt as though they still had enough money to pay the bills when things opened back up. They felt less sure after that.
“This is getting scary now,” she said. “If we reopen at 50 percent capacity, that’s 35 people we can have in each restaurant. At most, that’s 1.5 turns per table. Could we make it on that? Maybe.”
But, she said, that 50 percent capacity has no guarantees. If the country is entering a recession, she wonders whether people will want to spend. And then there are all the additional expenses: spacing of tables, wiping down in between, equipping staff members with protective gear. She and her husband have been trying to figure out how to cut up plexiglass sheets to surround the coffee bar as a sneeze guard. And then there’s restocking the walk-in refrigerator and the pantry: “If I had a jewelry shop, my inventory is never going to go bad — I can turn the lights back on and everything is going to be fine. There are businesses the PPP works great for.”
She ruminates about reopening too soon.
“If we have a second wave and have to close again, there’s no coming back,” she said. “That’s my biggest fear. For the first time in my life, I feel I’m at the mercy of other people’s calls. I’m a fighter, but right now I can’t get ahead.”
Will necessity make the restaurant landscape blander and more homogeneous?
Some kinds of restaurants and features won’t reappear. Buffets won’t be allowed, nor will salad bars or self-serve beverage counters, at least to start.
“Beast will never exist again,” said Naomi Pomeroy, owner of a James Beard Award-winning fine-dining restaurant of that name in Portland, Ore., as well as Expatriate, a small bar across the street. “I had two communal tables where you sit right next to people you don’t know. I have to shut off a concept I spent 12 years building, and I don’t know yet what the next thing is going to be.”
She said she is worried about creating a monoculture of restaurants as everyone’s primary imperative becomes survival.
Pomeroy has taken a leadership role in the newly formed Independent Restaurant Coalition, a group of thousands of independent restaurant owners and chefs who are asking Congress to create a $120 billion restaurant stabilization fund to give these small businesses a chance.
A recent National Bureau of Economic Research paper gave restaurants a 30 percent chance of reopening if the pandemic lasts four months and a 15 percent chance if it lasts six months. The average restaurant, it found, had expenses of more than $10,000 per month and enough cash on hand to last only two weeks.
Lots of people are comparing this situation to the Great Recession of 2008 and 2009, when, Pomeroy said, “restaurant people got intentional and scrappy” and the industry came roaring back. This is different, she said.
“We don’t have a vaccine, and by anyone’s estimation we’re 12 months out,” she said. “If you say, ‘Look, to keep the public safe, you’re going to be at 50 percent capacity,’ we can’t make it on 50 percent. And you can’t put an eight-week fix on an 18-month problem.”
Does reopening signal that restaurant workers are deemed expendable?
Hugh Acheson, a judge on “Top Chef” and owner of three restaurants in Georgia, said restaurants may be the classic canary in the coal mine — a trial balloon to see how viable post-pandemic business will be.
“We’ve been given the green light to reopen,” he said. “So why is the Governor’s Mansion still closed to tours? If people are going to die, they’re going to pick which ones.” He has taken to Twitter and television to explain why he thinks reopening would jeopardize his workers’ safety.
Georgia has Covid tested 88000 people. The population is 10.62 million. That is 0.8% of the population. The kicker is this: 23% tested positive.
We are not ready to fling the doors open. #sciencerulesKempdrools— Hugh Acheson (@HughAcheson) April 23, 2020
Acheson closed his restaurants March 15 and has been producing 500 to 800 meals a day with World Central Kitchen for hospitals and housing projects. He says 50 percent capacity isn’t viable, especially as landlords aren’t charging 50 percent rent — he says it is likely that after reopening there will be massive restaurant failures that lead to even higher rates of unemployment.
“Normal consumers don’t have any idea of how their lives would change, the economic tentacles that emanate from restaurants, the ripple effect,” he said. “I guess I’ll pivot to being a drive-through strip club.”
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